¶ 3701
Overview
Scope of the chapter. This chapter addresses what a creditor can learn about a debtor's assets and protective structures, and what the debtor and the planner can keep confidential. It covers the reach of discovery before and after judgment, the concept of control over documents held by others, the attorney-client privilege and work-product protection as applied to planning, the crime-fraud exception, the debtor's privilege against self-incrimination, the planner as a witness, and discovery of evidence held abroad. It closes with the planning file, the record built at T0 that will usually be read by the creditor if the plan is challenged.
Why discovery decides most cases. Few challenges to a protective structure are resolved on a pure question of law. The usual questions are factual: whether the debtor was solvent when the structure was funded, whether the debtor intended to hinder a known or foreseeable creditor, whether the debtor retained control in fact, and whether the debtor can comply with an order to repatriate. Each is answered from documents and testimony. The creditor obtains them through discovery, and the debtor's ability to resist depends on rules of relevance, control and privilege that give the debtor less protection than many clients expect. A plan that would survive scrutiny on its documents may fail because the documents were never created, or because communications the client assumed were privileged are ordered produced under the crime-fraud exception (see infra ¶ 3730).
Persons from whom discovery is sought. Discovery is directed at the debtor, at the persons who hold or administer the debtor's assets, and at the persons who advised on the structure. Banks, brokers, trust companies, entity managers, accountants and lawyers each hold part of the record, and each is subject to subpoena if within the reach of the court. Offshore trustees and custodians are outside the direct reach of an American subpoena, but a court may order the debtor to obtain documents from them if the debtor has control over the documents (see infra ¶ 3710.04), and the creditor may seek evidence abroad through the Hague Evidence Convention or in the haven's own courts (see infra ¶ 3760).
How to read the chapter. Paragraph 3710 describes the reach of discovery into assets and structures. Paragraphs 3720 and 3730 address privilege and its principal exception. Paragraph 3740 covers the Fifth Amendment, and ¶ 3750 the planner's position as a witness. Paragraph 3760 addresses evidence held abroad. Paragraph 3780 describes the planning file, and ¶ 3790 places discovery in the Threat Matrix.