What happens to the attorney-client privilege when a corporation enters bankruptcy or receivership? As the current economic crisis spawns criminal investigations into sinking companies, corporate officers (and their counsel) need to remember that waiver of the privilege may ultimately be decided by a trustee or receiver — not by current management — and that prosecutors still have considerable freedom to seek this material despite recent policy changes at the Justice Department.
Last August, the Justice Department once again revised its corporate charging guidelines amid a torrent of judicial and congressional criticism over consideration of corporate privilege waivers in connection with the government’s assessment of corporate cooperation. Having previously circumscribed the ability of line prosecutors to request corporate waivers of so-called “core” privileged material in the 2006 “McNulty memorandum,” the department’s “Filip memorandum” prohibits such requests altogether. It also forbids prosecutors from considering a corporation’s decision to deny access to such information as a factor in deciding whether to indict.
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