In an article for Bloomberg Law, Bass, Berry & Sims attorneys Joe Crace and Nick Deuschle examine the extent to which the attorney-client privilege transfers from seller to buyer in the asset sale. The article discusses the various ways in which courts analyze this issue, including the “practical consequences” test, which focuses on the real-world effects of the asset sale rather than the legal formalities of how the specific transaction is structured, namely the extent to which the buyer has continued the seller’s business under new ownership and whether the seller has discontinued business operations.
“Whether the attorney-client privilege transfers from a seller to a buyer in an asset sale is a fact-specific analysis, which typically focuses on whether the seller is selling, and the buyer is purchasing, control of a business that will continue operating under new ownership. In conducting this analysis, and as a practical matter, courts will seek to avoid a situation in which one party to an asset sale controls an ongoing business while another controls that business’s attorney-client privilege (unless the parties express a contrary intent).”
The full article, “Control of the Attorney-Client Privilege Following Asset Sales,” was published on August 14, 2019, by Bloomberg Law. Subscribers to Bloomberg Law may also read the full article here.