Richards Layton & Finger

Preserving a Seller's Attorney-Client Privilege After Great Hill

January 2, 2014

In Great Hill Equity Partners IV v. SIG Growth Equity Fund I, Del. Ch., C.A. No. 7906-CS (Nov. 15, 2013), a lawsuit arising from a private-company merger, the buyer discovered certain of the seller's privileged communications, including privileged communications concerning the merger negotiation, in computer files that had been delivered to the buyer in the merger. The Delaware Court of Chancery held that under Section 259 of the Delaware General Corporation Law, the seller's attorney-client privilege, including the seller's privileged communications concerning the merger negotiation, vested in the surviving corporation, which, following the merger, was a wholly owned and controlled subsidiary of the buyer. In this article, we identify several issues that emerge from the decision for practitioners' consideration.