In this case the Unsecured Creditors' Committee (hereinafter "the Committee") has been authorized by the court to pursue claims of the estate of the debtor, Calumet Farm, Inc., against former officers and directors and present directors of the debtor corporation. Such claims or causes of action ordinarily must be pursued by the debtor in possession as trustee of the estate of the debtor. In this instance the directors of the debtor in possession recused themselves from voting on a aresolution to authorize the commencement of actions against themselves and former officers and directors for alleged breaches of fiduciary duty while serving as officers and directors of the debtor. Accordingly, the court authorized the Committee to pursue any such claims or causes of action in behalf of the debtor's estate.

There is pending the application of the Committee, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, for an order directing Karen Compton, Executrix of the Estate of Lyle G. Robey, deceased, to appear for a Rule 2004 examination relating to the acts, conduct, and property of the debtor, and to matters which may affect the administration of the bankruptcy estate. Robey served as a director, member of the executive committee, and attorney for the debtor. He also served as CEO and attorney for Wright Enterprises, a related entity.

The scope of the examination of a nondebtor party under Rule 2004, particularly in a chapter 11 case such as this one, is very broad. The rule permits examination concerning "any . . . matter relevant to the case." The Committee further requests an order directing Ms. Compton to produce for examination numerous documents and items described in Exhibit "A" attached to the application.

Karen Compton, by counsel, in her capacity as Executrix of the estate of her brother, Lyle G. Robey, objects to the application on two grounds:

(1) the Committee has commenced against her as the representative of Robey's estate an action styled Phoenix Corporation, formerly known as Calumet Farms (sic), Inc. v. Karen Compton, Executrix of the estate of Lyle G. Robey, deceased, Civil Action No. 93-291, in the United States District Court for the Eastern District of Kentucky, asserting a claim for damages against Robey's estate for his alleged breach of his fiduciary duty during the time he served as a director of the debtor corporation, Calumet Farm, Inc., and


(2) Karen Compton previously has submitted to a Rule 2004 examination pursuant to a court order entered on a prior similar application of the Committee.


The complaint filed by Phoenix Corporation, f/k/a Calumet Farm, Inc., against Karen Compton as Executrix of the estate of Lyle G. Robey in the United States District Court for the Eastern District of Kentucky states that Robey died on December 31, 1992; that Karen Compton was appointed Executrix of Robey's estate on January 6, 1993, and that on June 14, 1993, Phoenix Corporation filed with the Fayette District Court, Probate Division, and also served on Karen Compton a written statement of claim based on the matters alleged in the complaint.

The complaint alleges that Robey and other named defendants failed to carry out their obligations as directors of Calumet Farm, Inc., misappropriated funds of Calumet, and that Robey, as attorney for Calumet Farm, Inc. and Wright Enterprises, committed malpractice in his advice to the board of directors of Calumet. The complaint seeks recovery from Robey's estate and other defendants of an amount in excess of one hundred millions dollars, plus punitive damages.

Under chapter 396 of the Kentucky Revised Statutes a claim against a decedent's estate that arose before the death of the decedent must be presented within six months after the appointment of the personal representative of the estate, otherwise the claim is barred.

Consequently, the only claim the debtor in possession may now assert against the decedent's estate is the claim which has already been asserted.

Thus, the discovery which the Committee, by counsel, seeks to conduct under Rule 2004 can only be infurtherance of the claim timely presented against Robey's estate. While discovery under Rule 2004 might reveal other claims against Robey's estate, in the circumstances here presented those claims are barred.

The court does not believe that the commencement of an adversary proceeding or civil action by the trustee of a bankruptcy estate, or when authorized, by a creditors' committee in behalf of a bankruptcy estate, precludes subsequent discovery under Rule 2004 in every circumstance where such discivery may reveal other causes of action which the bankruptcy estate may have against the same party or parties. However, because in this instance, the Committee is barred from pursuing other causes of action against Robey's estate, the court believes that the attempt by the Committee to examine into Robey's affairs under the aegis of Rule 2004 is inappropriate. The Committee must conduct further discovery in the civil action in the U.S. District Court within the constraints of Rule 26 of the Federal Rules of Civil Procedure.

Accordingly, the application of the Committee for an order permitting a Rule 2004 examination of Karen Compton as Executrix of Robey's estate is denied.

Dated: September 28, 1995.


By the court -






Copies to:


David A. Caldwell, Esq.

James E. Burke, Esq.