In Re NVMS, LLC, Case No. 308-01901 (Bkrtcy.M.D.Tenn. Mar 21, 2008)

The debtor in this case is a medical services company who contracted with Medical Billing Partnership (“MBP”) to handle all of its billing. After filing for bankruptcy, the debtor asked MBP to provide billing data so as to determine the status of claims, but MBP refused to provide the information due to the proprietary software. MBP did provide a hard copy as well as a CD-rom with the information in an unformatted text file.

Yet, according to sworn statements, “there is no way to translate or convert the text on the CD-rom into a useful format without ‘manually going through each line of text and coding or delimiting it, which would require enormous time, effort, and money.’” Opinion at 1-2. The court, in weighing the competing concerns of trade secrets versus discoverable information decided that “data in its native format is discoverable” but ordered the electronic information to be used only for the debtor’s claims and returned after all claims have been resolved. Opinion at 3.

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