In M&A transactions, companies disclose sensitive information to their transaction counterparties and financial advisors, and the disclosure of this information often implicates attorney-client privilege issues. This article addresses two common attorney-client privilege questions that arise in M&A transactions.
2. Does the disclosure of attorney-client privileged information to transaction counterparties during due diligence and negotiations waive the privilege? It is common for a purchaser, in the course of its due diligence, to request information from the seller to assess the litigation, compliance or regulatory risks of the acquisition. Because the attorney-client privilege is usually waived when a communication is disclosed to a third party, the seller often is reluctant to provide privileged information to the purchaser. However, without sharing of information, the purchaser may decline to go forward with the deal.
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