Bankruptcy

Redaction Gone Awry - Screw-up Leads To Disclosure Of Clusely Guarded Settlement, And Value Of Facebook

By Scott Riddle

This is not Bankruptcy related, but hopefully it will be a good tip for lawyers who try to electronically redact or remove text from documents. For lawyers in states or districts with electronic filing (which includes virtually all Bankruptcy lawyers in Georgia), it is important to know how to properly redact a document in .pdf format. 

Otherwise, you might get a major screw-up like the one discussed here.  Because information was not properly redacted,sensitive information in a legal dispute over Facebook was obtained by the press. 

After taking drastic preventative measures to keep the settlement confidential, including barring reporters from the courtroom and redacting portions of the documents, Facebook has been foiled by the most laughable lull in security I’ve heard of:

Large portions of that hearing are redacted in a transcript of the June hearing, but The Associated Press was able to read the blacked-out portions by copying from an electronic version of the document and pasting the results into another document.

 Read that again. Just, wow.

Now for the juicy details:

The document reveals that Facebook’s internal valuation of the company is $3.7 billion, or $8.88 per share - far less than the $15 billion implied valuation established by the Microsoft investment in 2007 (though this comes as no surprise, as a value around $4 billion has been rumored for months).

If you have Adobe Acrobat versions 8 or 9, it includes a redaction tool.  If you do not have these versions, get it and make sure everyone knows how to use it.   For much more information on using Acrobat check out PDF for Lawyers Blog.

Facebook is worth $3.7 Billion? Wow...

Full post as published by Georgia Bankruptcy Blog on February 14, 2009 (boomark / email).