Presented By Practical Law


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Courts have taken a variety of approaches to determining who owns the pre-transaction attorney-client privilege after a merger, asset sale or other similar corporate transaction.  Given the lack of a bright-line rule as to which entities will control the privilege, companies should understand and account for what will happen to attorney-client communications post-closing.  The failure to do so may result not only in confusion, but in litigation between the parties and potentially having to relinquish privileged material.

This Seller Beware: Protecting Privileged Communications After a Corporate Transaction Article from Practical Law examines the judicial approaches to pre-transaction communications protected by the attorney-client privilege and issues companies entering into corporate transactions should consider to preserve the privilege, including:

  • Privileged pre-transaction communications under Delaware and New York Law.
  • The practical consequences approach to privileged pre-transaction communications.
  • What companies involved in a transaction should do to protect attorney-client communications, such as:
    • Determine under which state law the agreement is governed and whether there is an applicable statute.
    • Consider which categories of communications are particularly sensitive to disclosure.
    • Specify in the agreement which entity will retain control of which types of privileged communications post-closing, to the extent allowed under applicable law.

Proactively accounting for these communications will ensure that the transacting parties, rather than a court, will be the final arbiter of who owns the privilege.

To read the full Practical Law Article, see Seller Beware: Protecting Privileged Communications After a Corporate Transaction.

Additional related resources such as Attorney-Client Privilege Checklist: Scope of Protection Attorney-Client Privilege Checklist: Scope of Protection and more are available now with a free, no-obligation trial to Practical Law.