Friday, March 28, 2014

Judge Wettick: Attorney-Client Privilege Does Not Continue For Defunct Companies

In his recent decision in the case of Red Vision Systems, Inc. et al. v. National Real Estate Information Services, L.P, et al., No. GD - 13 - 008572 (C.P. Allegh. Co. Feb. 26, 2014 Wettick, J.), Judge Wettick dealt with the novel issue of the application of the attorney-client privilege in the context of a request for the production of documents propounded upon a dissolved/non-operating company. 

After a thorough review of the scope of the attorney-client privilege, Judge Wettick ultimately ruled that the privilege did not extend to corporations that were no longer in business.  Accordingly, a former in-house counsel for several defunct companies was ordered to turn over documents in discovery related to status of the companies' assets.

Judge R. Stanton Wettick
Allegheny County
Judge Wettick rejected an effort to compare the situation of a dissolved corporation to that of a deceased person -- the attorney-client privilege is deemed to continue once a person passes away.  The court noted that the same concerns of confidentiality do not exist in the corporate setting as corporate officials can not expect the same level of privacy or confidentiality once a corporation goes out of business as the new management of the company or a trustee in bankruptcy may be entitled to access to the information at issue.

It is noted that Judge Wettick's decision was recently appealed up to the Superior Court.

Judge Wettick's decision may be viewed HERE.

I send thanks to Attorney Roy Leonard of the Stonecipher Law Firm in Pittsburgh for bringing this case to my attention.

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