MFI stockholders retain attorney-client privilege in acquisition by Post

April 18, 2014

(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)

Practitioner Insights thumbnail 2Under the parties’ agreement and plan of merger, the stockholders and option holders of MFI Holding Corp. will retain the attorney-client privilege in the company’s acquisition by Post Holdings Inc. While this issue has not traditionally been an area of negotiation between parties, the Delaware Chancery Court’s decision in Great Hill Equity Partners IV LP v. SIG Growth Equity Fund, 80 A.3d 155 (Del.Ch. 2013) has made the transfer of attorney-client privilege a new concern for target companies and their sellers.

Implications of Great Hill Equity

In Great Hill, the Delaware Chancery Court held that pre-closing attorney-client privileges between the target, its sellers and counsel relating to a merger or acquisition generally pass to the buyer upon closing. Further, if privileged documents physically transfer to the buyer, the seller can be deemed to waive the privilege.

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MFI stockholders retain attorney-client privilege in acquisition by Post

(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)

 

 (April 18, 2014) – Under the parties’ agreement and plan of merger, the stockholders and option holders of MFI Holding Corp. will retain the attorney-client privilege in the company’s acquisition by Post Holdings Inc. While this issue has not traditionally been an area of negotiation between parties, the Delaware Chancery Court’s decision in Great Hill Equity Partners IV LP v. SIG Growth Equity Fund, 80 A.3d 155 (Del.Ch. 2013) has made the transfer of attorney-client privilege a new concern for target companies and their sellers.

Implications of Great Hill Equity

In Great Hill, the Delaware Chancery Court held that pre-closing attorney-client privileges between the target, its sellers and counsel relating to a merger or acquisition generally pass to the buyer upon closing. Further, if privileged documents physically transfer to the buyer, the seller can be deemed to waive the privilege.

Continue reading on WestlawNext Practitioner Insights (subscription required)

 

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