Thornburg Creditor Group Gets Approval To Seek Discovery

NEW YORK (Reuters) – A U.S. bankruptcy judge will allow a Thornburg Mortgage Inc. creditor group to request documents and depositions from parties including UBS as the group seeks to unearth more assets from the estate, according to court documents.

The court order means some of the parties deposed by the official committee of unsecured creditors will have to open their books on transactions including pre-bankruptcy transfers and collateral seizures.

The Santa Fe, New Mexico-based company, which specialized in making mortgages larger than $417,000 to borrowers with good credit, filed for bankruptcy on May 1.

The creditors committee had asked a judge to approve a so-called Bankruptcy Rule 2004, which allows one party in a bankruptcy proceeding to compel discovery or other examination against another party. Counterparties named in the motion include JPMorgan Chase Funding, Credit Suisse International, Royal Bank of Scotland Plc (93OT_p.L) and UBS AG (UBSN.VX).

The creditor committee also said it would likely seek discovery from certain former investors and former members of the board of directors of Thornburg.

U.S. Bankruptcy Judge Duncan Keir entered the order on June 16.

The case is In re: Thornburg Mortgage Inc., U.S. Bankruptcy Court, District of Maryland, No. 09-17787. (Reporting by Chelsea Emery; Editing by Gary Hill)