Bankrupt resort seeks non-disclosure of records underlying sewer debt settlement with Vernon Twp.

A Vernon Township (Sussex County) resort has asked a court to block release of bankruptcy records related to its settlement with the Vernon Township Municipal Utilities Authority (MUA) over the resort’s $26 million sewer debt. Under the proposed agreement before the court, some financial records would even be off limits to elected officials, and records must be returned or destroyed upon final settlement. For financial documents that officials would not be allowed to see, per the proposed court order, officials would be advised of the information in the documents by their attorney for the purpose of settlement deliberation. However, the public would have no knowledge of those details and thus no basis to assess the fairness of the Township’s settlement with regard to the resort’s sewer debt. NJFOG officer John Paff is quoted in the article and notes that the public interest is being given short shrift. Full passage from the article:


…John Paff, a leading open-records activist and board member of the New Jersey Foundation for Open Government, suggested the proposed agreement with Mountain Creek could come dangerously close to violating the spirit of open government.

“The most important thing is that sufficient documents remain so the public can tell how much it’s losing by all this and to see if the outcome of these proceedings is a reasonable thing to have occurred,” Paff said. “If the township is going to get only $3 million of the $26 million it’s owed, how else is the public going to be able to judge the fairness of the proceedings?”

Paff acknowledged there could be legitimate reasons for sealing certain documents from public view, but expressed concern that the public’s interest might be given short shrift in the process.

“The problem with these sealing and confidentiality orders,” Paff said, “is it’s simply not reasonable for the average citizen or even the average newspaper to be expected to contest it, and when a judge sees there’s nobody in opposition, he probably then is even more inclined to just say ‘I’ll grant it.’ ”

Paff said that without the proposed agreement being reported, “the public wouldn’t even know about it. It’s not like the public is being served on any of this stuff.”


New Jersey Herald
Mountain Creek asks court to OK confidentiality in bankruptcy case
By Eric Obernauer
July 27, 2017