Creditors of the bankrupt EPIC partnerships met as a group for the first time yesterday amidst a court-imposed secrecy order that participants said limited the utility of the proceedings.
The meeting was called to provide financial information for the creditors of more than 350 Equity Programs Investment Corp. partnerships, whose default on more than $1 billion of mortgage obligations triggered the bankruptcy. Representatives of the real estate investment group and the Maryland Deposit Insurance Fund, the agency that has been appointed conservator of the company answered questions from the approximately 150 individuals present at the meeting in Alexandria.
The proceedings were hindered, however, by the admonition of the officials in charge that they could not answer questions related to the names of secured creditors and the property underlying their mortgage loans. That information has been sealed by Martin V. B. Bostetter, the Alexandria bankruptcy judge handling the case.
At a normal meeting of creditors involved in a bankruptcy, much of the discussion centers on the value of the property owned by the debtor as a way of determining the exact amount of equity available to the creditors, said Norman Oliver, the U.S. Trustee official who ran yesterday's meeting.
"But that's the exact information that was sealed," he said. Oliver said the meeting was "really about half as productive as it would have been if we had the information, maybe even less."
A motion was filed last week by The Washington Post and The New York Times asking Bostetter to reconsider his secrecy order. No hearing has yet been scheduled to hear the request. Bostetter had orginally sealed the information in response to a request from some creditors, who said they feared disclosure could set off unfounded fears about the financial stability of their banks and savings and loan institutions.