How much of an ownership interest does a parent have to have in a subsidiary for the attorney-client privilege to extend to communications between the susidiary and the lawyer for the parent company?
Judge Gale pondered that question in SCR-Tech v. Evonik Energy Services LLC, 2013 NCBC 42 [an enhanced version of this opinion is available to lexis.com subscribers], and wrote on a clean slate, given that he found no applicable North Carolina precedent. Op. ¶8.
The Plaintiff, SCR-Tech, had been owned by a holding company in which Ebinger had a minority (37.5%) interest. The communications withheld on the basis of privilege covered a three year period during which SCR-Tech, Ebinger, and counsel were negotiating the sale of SCR-Tech.
Defendants said that to be considered SCR-Tech's "parent," Ebinger needed to be a majority owner with a greater than 50% interest.
That argument launched Judge Gale into distinguishing the "joint client" aspect of the attorney-client privilege from the "common interest" doctrine.
Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.
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