Parties involved in litigation some times request financial information about the opposing parties. The requests may be expressed broadly to include proprietary or personal financials. My clients have often asked whether they can be compelled to reveal financial information to opposing parties.
The answer depends upon the nature of litigation. Prior to judgment, the scope of financial discovery is limited. Private or personal financial information requested of an opposing party must be relevant to the issues in the case. For example, where a supplier filed a complaint against a corporate customer for failure to pay for goods shipped pursuant to a supply contract the supplier could not obtain the corporate customers financials including its costs, financial projections, employee salaries or profit margins. The financial information in that case was not directly relevant to the corporate customer’s asserted defenses to claims of money owed under a contract.
If the opposing party previously has obtained a money judgment and is involved in an effort to collect the judgment then the law entitles the judgment creditor to seek a broad range of financial information from the judgment debtor. The debtor may be compelled to reveal all financial information that reasonable leads to discovery of assets that the creditor can target to collect the judgment.
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