Buyers doing due diligence in connection with merger and acquisition transactions typically request information about the seller’s contract rights, patent rights, and/or pending/threatened litigations. Often times, the most relevant and useful information the seller may have in this regard are documents that are subject to the attorney-client privilege. Can the seller provide documents to the would-be buyer that are covered by the attorney client privilege without waiving the privilege? The answer turns on whether there is a “common interest” between the buyer and seller. That, in turn, could depend on what law is applied.

Ordinarily, providing a privileged document to a third party waives the attorney client privilege. The common interest doctrine is an exception.1 Under the common interest doctrine, “[a] third party may be privy to the communication between an attorney and a client, without destroying the privilege, if the communication is made for the purpose of furthering a nearly identical legal interest shared by the client and the third party.”2 Absent the existence of a valid common interest, exchanging privileged documents with the buyer during due diligence will waive the privilege. Exchanging privileged documents, even following the execution of a merger agreement, will often not suffice to protect the privilege if third parties later seek the privileged information. Unlike some states, New York takes a fairly narrow view of the common interest privilege.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]