Privilege

Privilege

Thomas E. Spahn | McGuireWoods LLP

In his previous Privilege Point, McGuireWoods partner, Thomas Spahn, described a Delaware Chancery Court’s analysis of pre-closing privileged transactional documents in: (1) a stock sale (in which the statutory “default” position is that the buyer acquires those documents, unless the seller explicitly negotiates their exclusion); and (2) an asset sale (in which the seller retains ownership of those, unless the buyer explicitly negotiates for their transfer). Here, he picks up where he left off.

Privilege

Thomas E. Spahn | McGuireWoods LLP

Corporate stock and asset sale transactions necessarily implicate ownership of: (1) ordinary day-to-day privileged communications about environmental matters, labor matters, etc., and (2) privileged communications about the transactions themselves. Buyers and sellers normally agree that the buyer should receive the first type, but disputes frequently arise about the second type.

Privilege

Thomas E. Spahn | McGuireWoods LLP

Many courts have dealt with corporate and other organizational entities’ constituents’ ability to waive those entities’ privilege protection. In the corporate context, most courts hold that any constituent (even middle management, etc.) trusted to handle privileged communications can waive the corporation’s privilege -- if she acted in the corporation’s interest rather than adverse to its interest.