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On Bank Litigation–E-discovery (Part 2): The Litigation Hold Process

Stan Gibson’s timely series on Litigation Readiness and Electronic Discovery continues with an explanation of the vital “Litigation Hold” process, what it is and how it is implemented. Stan is co-chair of JMBM’s E-Discovery Group, and at my request, is sharing his wealth of knowledge with our readers in a four-segment series. Members of the JMBM Special Assets Team™ assist clients in implementing a litigation hold and in making certain that all available information, whether stored on paper or electronically, or known only to witnesses, is collected and preserved.

Our second installment builds on Stan’s opening segment, “Record Retention and Compliance,” which is a must read for anyone administering litigation in connection with a troubled loan.


Implement a Legal Hold Process

The next step in litigation readiness is establishing a legal hold procedure. When a company anticipates litigation, the legal hold process sorts and preserves documents that may be required in court. It should be systematic and repeatable, guaranteeing all relevant paper and electronic documents are identified, organized and exempted from any automatic deletion or destruction policies. There should be a system in place to enforce these guidelines and set of regular reminders to ensure that the correct procedure is applied to each document.

A bare-bones legal hold process includes the identification of electronically stored data, as well as a notation of its location. Custodians for the documents should be identified and notified so they’re aware of relevant documents and applicable procedures. The IT department should be notified of the legal hold process so they can respond appropriately.

Where automatic deletion of documents is a concern, a legal hold process provides a system for verification so custodians and IT staff have proof that a document was preserved. The legal hold policy should include regular updates and reminders for custodians, tracking of holds and custodians, and a procedure for lifting legal holds once they’re no longer necessary.

The procedure may be different in each department, but each attorney should follow the same basic set of rules to make sure preservation obligations are kept. Without a legal hold process or proper enforcement a company can be vulnerable to legal or financial sanctions.

NEXT: Creating a data map

This is Dick Rogan, bank lawyer and author of, signing off for now. Join us again soon to check out what’s new in the World of Workouts.

Year after year, day after day, workout professionals in the know rely on JMBM’s Special Assets Team™ to handle problem commercial and real estate loans. Whatever problem loans you have, chances are, we’ve seen it. Give us a call.


Our Perspective. JMBM represents commercial banks, special servicers, private lenders, asset-based lenders, hard money lenders and factors. We help lender clients throughout the United States craft business and legal solutions to their commercial and real estate troubled loans. For more information, please contact Dick Rogan at, or (415) 398-8080.

Richard A. Rogan is Chair of the JMBM Special Assets Team™. He also serves as the co-managing partner of JMBM’s San Francisco office and co-chair of its Bankruptcy Practice Group.

JMBM’s Special Assets Team™ has represented hundreds of lenders in California and throughout the United States. We regularly appear in bankruptcy courts, district courts and superior courts. We are proud to serve as trusted counsel and advisors who look for a business solution and try to help lenders find the best possible resolution for each troubled loan. Whether a loan is being newly documented, restructured or litigated, JMBM’s Special Assets Team™ has the skill, know-how and experience to solve your problem in a practical no-nonsense way.

NOTE TO CONSUMERS: As a matter of Firm policy, JMBM does not represent individual consumers who have disputes with their lenders. Many lenders have specialized consumer workout professionals who have the time to help consumer borrowers. There are many fine attorneys who specialize in representing consumers. Individuals with consumer lending problems should contact a lawyer or law firm who specializes in consumer insolvency and bankruptcy in their local area. When in doubt, we suggest you contact your local bar association’s Lawyer Referral Service. [For example, see Bar Association of SF or LA County Bar Association Lawyer Referral Services]

JMBM does not provide legal advice to consumers, and cannot respond to consumer inquiries.