A. H. Robins Co. asked a federal judge today to keep secret the statements made by company officers, directors, and employes in an investigation of several million dollars worth of improper payments made after the company filed for voluntary bankruptcy.
The wide-ranging protective, or gag, order also would seal all information turned up in the investigation, prohibit anyone involved in the proceeding from making out-of-court statements about the materials and forbid dissemination of deposition testimony.
The federal government has asked the court to hold Robins in contempt and appoint a trustee to run the company during the bankruptcy proceedings. Attorneys are investigating who authorized the improper payments, which include about $1.67 million in executive bonuses.
Robins has admitted the payments violated a consent order barring payouts without the approval of U.S. District Judge Robert R. Merhige Jr.
The protective order now being sought from Merhige would remain in force until the materials become public at a hearing on the contempt-and-trustee motion set for June 5.
Merhige has presided over the Chapter 11 case since last Aug. 21, when massive product-safety litigation brought by women who used the Dalkon Shield intrauterine contraceptive device led Robins to seek a financial reorganization under Chapter 11 of the bankruptcy code.
Company bankruptcy attorney Dennis J. Drebsky told reporters before today's motion was filed that, on fairness grounds, he wanted to avoid piecemeal exposure of matters bearing on the reputations of Robins officials. Drebsky's New York law firm, Skadden, Arps, Slate, Meager & Flom, filed the motion for the protective order.
Richmond Newspapers Inc., and The Washington Post said that they plan to intervene to oppose the Robins motion. A hearing is set for Monday.
Stanley K. Joynes III, counsel for the committee of future Dalkon Shield claimants, said he had not seen today's filings, but that, based on what he's been told, he is inclined to oppose the motion. Opposition is expected from U.S. Trustee William C. White, a Justice Department official.
Assistant U.S. Attorney S. David Schiller filed the motion to hold Robins in contempt on March 12. Four weeks later, Merhige, angered by the failure of Robins to identify the officials who had authorized the payments, told Schiller: "Go get 'em. Get 'em under oath." Since then, Schiller has taken depositions from numerous Robins officers and employes.