Bankruptcy judge changes his mind on Bloomberg order

In a hearing today, U.S. Bankruptcy Judge Christopher S. Sontchi said he should have granted Bloomberg’s request to be heard on an expedited basis in objecting to his investigation of Bloomberg reporters’ sources. Bloomberg objected to the scope of the investigation of a possible violation of a confidentiality order in a bankruptcy case after the judge required 123 individuals involved in the case to file declarations about contacts with any Bloomberg reporters about the debtor in the previous 60 days.

Sontchi has now said he will hear Bloomberg’s objections to his initial order on Friday morning.

While not happy that a court is investigating a reporter’s confidential sources and initially issued such a broad order, the Reporters Committee is pleased that the judge has changed his mind about letting Bloomberg be heard and may reconsider the scope of the order.

“We hope that this shows that the court knows its order was overbroad, and we look forward to a reconsideration that respects the rights of the news media to cover important stories of public interest without interference,” Bruce Brown, the Reporters Committee’s executive director, said Wednesday afternoon.

The judge said that he has not seen any of the declarations that have been filed under seal, and has directed court personnel not to review or disseminate them.

The controversy arose in the bankruptcy case of MolyCorp Inc., a rare earth mining company. Bloomberg reporter Jodi Xu Klein’s stories on the bankruptcy negotiations allegedly contained, according to Sontchi’s order, information that was subject to a confidentiality order.