Bloomberg Challenges Court Order In Case Which Could End Press Freedom

Updated on

Press Freedom is at stake…. Bloomberg challenged the order of a U.S. Bankruptcy Judge requiring dozens of bankruptcy professionals to make sworn statements involving their conversations with the media company’s reporters about Molycorp, the struggling rare-earths mining company. The case here is much bigger than the bankrupt rare earth company and gets to the core of press freedom.

Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Delaware, issued the order last week due to concerns that Bloomberg reporters may have used leaked information from mediation in their articles about Molycorp. The sources (123 people) were given until Tuesday, to disclose their communications with the media company over the past 60 days. The ramifications in this case are serious as the judge is asking reporters to release information which could comprise their ability to report in the future and set a precedent which over-turns reporter source privilege.

Press Freedom  – Bloomberg argues the order infringes First Amendment

Bloomberg along with the Reporters Committee for Freedom of the Press and other news organizations asked Judge Sontchi to reconsider his order.

“As currently drafted, the order is overly broad and vague and therefore unconstitutionally infringes upon, and impermissibly chills, the First Amendment rights of Bloomberg, any sources it may have regarding Molycorp, and the public,” according to the attorney representing Bloomberg’ in court papers filed Friday.

Molycorp filed for Chapter 11 bankruptcy protection to facilitate its financial restructuring in June last year. Bloomberg has been reporting about the disagreement between the company’s bondholders and senior lender, Oaktree Capital Management regarding its restructuring.

Bloomberg recently reported that the confidential mediation failed to develop a consensual plan that would allow Molycorp to exit bankruptcy based on information from identified sources. Judge Sontchi ordered the company, its creditors, and other parties to resolve the matter through a confidential mediation in November.

The Reporters Committee for Freedom of the Press sent a letter to Judge Sontchi explaining that his order would have consequences regarding press freedom far beyond the individual judgement regarding Molycorp.

According to the organization, “The repercussions from a single legal demand affect not just the work of the targeted journalist but all other journalists whose sources will hesitate and hold back information on matters of public concern, such as the operation of the judicial system.”

Press Freedom  – Judge refuses to expedite schedule for arguments

Judge Sontchi rejected the request to expedite the schedule for arguments concerning his order. He also refused to delay his order for 48 hours to provide Bloomberg a chance to file a motion to the federal court to obtain an emergency order to suspend his ruling.
The media company decided to seek an emergency hearing and stay on Judge Sontchi’s order at the U.S. District Court in Wilmington.

While ValueWalk is apolitical we hope Judge Sontchi does not destroy freedom of the press by siding with the big corporation here. The future of journalism is at stake and if sources do not feel comfortable talking in confidence to reporters about important issues, the future of journalism will be one full of cat listicles.

Leave a Comment