How to Clear a Room: Bankruptcy Court Reduces Rent and Long-Term Storage Costs

The U.S. Bankruptcy Court for the Southern District of New York had a room filled with files. That’s not unusual. Even though today most cases are filed electronically, case records have a way of accumulating over the years. But in less than five months, with the end of the fiscal year, the court needed to clear the room. The files had to go.

“Our court is looking at ways to reduce space –along with our rent bill. We had 5,279 square feet we wanted to release,” said Bankruptcy Clerk of Court Vito Genna. “Our goal was to empty the room before the end of the fiscal year.”

The Southern District of New York Bankruptcy court’s cost containment effort is part of the Judiciary’s drive to pare costs. One major initiative reduces the federal courts’ footprint — as every square foot adds to the annual $1 billion rent bill. Last year, the courts released approximately 242,403 square feet, saving nearly $6 million annually. Another efficiency and cost-saving initiative has revised the court records disposition schedule. By law, the National Archives and Records Administration through its Federal Records Centers (FRC) program, must charge the Judiciary for records storage – which cost the Judiciary over $6.2 million in 2010, before new retention schedules were implemented. The successful reappraisal of civil and bankruptcy records schedules has reduced the Judiciary’s records storage costs by $2.1 million since 2010. This does not include the cost avoidance gained by avoiding higher storage fees.

But before any files could be boxed up and shipped off to an FRC, bankruptcy court staff needed to go through every single case file, determine which records needed to be retained—either permanently because they were historic or temporarily because the records retention schedule required it—and which records were eligible for disposition.

Certain bankruptcy case records are designated as permanent – for example, all cases filed before 1941; family farm and fishermen cases, historic bankruptcy cases, and Chapter 9 municipality cases.

And it was the job of Annya Acosta, the bankruptcy court services supervisor, to get it done.

“There were files all over the place. My first thought was ‘Where do I begin?’” Acosta remembers.

At the Administrative Office, Judiciary Records Officer Omar Herran in the Court Services Programs Division helps courts follow Judicial Conference-approved changes to the Judiciary’s records schedules. He smoothed the way for the packing, transportation and storage of the bankruptcy court’s records.

Herran’s advice for Annya? First, inventory all the case files in the records room.

“And that’s exactly what we did,” Acosta said. “We started to go through all the files, making sure they were filed properly. We looked for mis-filed and missing documents, adding any missing case numbers, filed, or closed dates. We replaced old dilapidated folders, especially for the historical cases that we knew would go to the federal archives for preservation. We recorded every single case file we had on a spreadsheet. We organized it all.”

Of course, she had some help.

“All the staff at the court – our intake personnel, our customer service desk, our courtroom deputies, everybody—helped to prepare files. Our IT staff not only helped move files, they created an archive database to store all the accession information,” Acosta said.

Meanwhile, time was slipping away and the September 30 deadline loomed. Pressure mounted to clear the room.

With the inventory complete and armed with a spreadsheet of all the room’s case files, Acosta and her team set up a production line. They began logging in every single case file and the number of the box in which it was being stored. The day before the movers were due to pick up the boxes, staff worked well into the evening until the last file box was closed.

On moving day, the boxes filled 20 pallets. While 95 cases closed in 1999 were eligible for destruction and set aside for immediate shredding, just over 1,000 boxes with bankruptcy court records were packed and ready to go to the FRC — enough to stretch, end-to-end, the length of six football fields. Historical cases were separated for preservation. In total, 15 historical cases, filling 344 boxes, were archived permanently, while 637 boxes with 988 closed cases were marked for temporary archiving and eventual disposition. From these, the National Archives will extract an additional two percent sample for permanent preservation.

Money will be saved with the scheduled disposal, rather than indefinite storage, of every case file. Storage costs shifted from an annual $31 per square foot at the court, to less than $3 a square foot at the FRC. In addition, releasing the now empty room saved the court rent.

“It saved us quite a bit,” agreed Genna, “including a rent cost avoidance of $892,000 for the remainder of the GSA occupancy agreement term.”

“It was a lot of work,” Acosta admits. “I’m happy we accounted for every case in that room and that we took the time to organize every case file. Everyone took great pride in what we were doing, pride in archiving the files properly and pride in completing a project that saved us so much money. It wasn’t easy, but we showed it can be done.”