Bloomberg LP will get an opportunity to contest a U.S. judge’s order requiring more than 100 people to disclose if they shared confidential information with the media company’s reporters about the bankruptcy of Molycorp Inc.
U.S. Bankruptcy Judge Christopher Sontchi said during a telephone hearing on Wednesday that he erred a day earlier when he rejected Bloomberg’s motion for a hearing at which it could seek a stay.
“I had made a mistake in denying the motion,” Sontchi said, adding the matter would go forward at a hearing on Friday morning in Bankruptcy Court in Delaware.
Concerned about leaks from confidential mediation in Molycorp’s Chapter 11 bankruptcy, Sontchi last week ordered 123 people to disclose their contacts with Bloomberg reporters over the prior 60 days.
Bloomberg had published three articles citing unidentified sources that went into efforts to find a buyer for Molycorp after the start of the confidential mediation.
The media company is a competitor of Reuters.
Gregg Leslie, legal defense director for the Reporters Committee for Freedom of the Press, said Sontchi’s order went too far and could potentially sweep up statements from contacts with no ties to stories that reported information covered by a protective order.
Judges typically look into leaks only if they jeopardize the integrity of a trial or a defendant’s constitutional rights, Leslie said in an email.
Bloomberg could not immediately be reached for comment.
Molycorp is the largest U.S. producer and processor of the rare earth elements used in cellphones and military equipment. Earlier this month, the company reached agreements with its junior creditors to clear the way for it to accept bids and ask creditors to vote on a plan to exit bankruptcy.
Molycorp has been battling bondholders who say it is doing the bidding of its lender, Oaktree Capital Management, in its restructuring efforts.
The mining company filed for bankruptcy in June with more than $1.7 billion in debt after prices for rare earths fell when China lifted export restrictions.
The case is In re Molycorp Inc et al, in the U.S. Bankruptcy Court, District of Delaware, No. 15-11357.
(Reporting by Jim Christie in San Francisco- Editing by Peter Cooney)
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