Cardinal Fastener & Specialty Co., Inc.

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
In re: ) Case No. 11-15719
)
CARDINAL FASTENER & SPECIALTY ) Chapter 7
CO., INC., )
) Chief Judge Pat E. Morgenstern-Clarren
Debtor. )
) MEMORANDUM OF OPINION
) AND ORDER1
Reminger Co., LPA (the firm) served as special counsel to chapter 11 debtor Cardinal
Fastener & Specialty Co., Inc. When the case converted to chapter 7, the chapter 7 trustee asked
the firm to turn over documents relating to or belonging to the debtor. The firm declined to do
so, responding that at least some of the documents are protected by the attorney-client privilege
and the work product doctrine based on the firm’s alleged separate representation of the debtor’s
officers and directors. The trustee then filed a turnover motion, which the firm opposes. For the
reasons stated below, the trustee’s motion is granted.2
I. JURISDICTION
Jurisdiction exists under 28 U.S.C. 1334 and General Order No. 2012-7 entered by the
United States District Court for the Northern District of Ohio on April 4, 2012. This is a core
proceeding under 28 U.S.C. § 157(b)(2), and it is within the court’s constitutional authority as
analyzed by the United States Supreme Court in Stern v. Marshall, 131 S.Ct. 2594 (2011).
This opinion is not intended for publication, either print or electronic.1
Docket 251.2
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II. STIPULATED FACTS
The debtor Cardinal Fastener & Speciality Co., Inc. filed its chapter 11 case on June 30,
2011. On July 18, 2012, the court granted the debtor’s motion to convert the case to chapter 7.
The chapter 7 trustee and the firm submitted this dispute for decision on these stipulated facts:3
1. On or about November 14, 2011, the Official Committee of Unsecured
Creditors (the “Committee”) sent a demand letter (the “Demand”) to the Debtor,
alleging, among other things, certain claims and causes of action against the Debtor.
Following that, the Demand letter
states:
Therefore, the Committee, on behalf of the unsecured
creditors, hereby demands payment from the Debtor on the
unsecured claims in an amount currently estimated at
$4,138,841.00. The Committee further hereby demands
that the Debtor provide notice to the Debtor’s insurance
carrier for the Debtor’s directors and officers liability
insurance (“D&O Insurance”) of the claims being asserted
by the Committee.
In addition to the foregoing, the Committee anticipates that
the Debtor also possesses claims against its officers and
directors, including breach of fiduciary duty, arising from
their negligence or fraudulent mischaracterization or
misrepresentation of the Debtor’s financial statements.
Therefore, the Committee further demands that the Debtor
provide notice to the Debtor’s insurance carrier of the
Debtor’s claims.
The Demand letter also states in a footnote:
The Committee is also in the process of investigating
additional claims that the unsecured creditors may possess
against the Debtor, its officers, directors, agents and equity
holders.
(Exhibit A, Demand Letter; see also Application to Employ at Doc. # 186 at p. 4 ¶ 13).
Docket 280, 281.3
2
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2. On December 9, 2011, a Reminger time entry reads: “Correspondence to
[Debtor’s counsel] Rocco Debitetto (“Debitetto”) regarding retention by [the Debtor] in
connection with claims referenced by [the Committee].” (Exhibit B, Reminger Time
Entries (“Time Entries”) at p. 3).
3. By letter dated December 15, 2011 , the Debtor responded to the4
Committee’s Demand letter (the “Response”), stating that Reminger “has been engaged
vis-à-vis [the Debtor’s] insurer in order to address the alleged claims and causes of action
set forth in the Demand Letter, including those regarding alleged director and officer
claims.” (Exhibit C, Letter from the Debtor to the Committee dated December 15, 2012).
4. On January 11, 2012, the Committee filed its Rule 2004 motion to obtain
documents from the Debtor and the Court approved the motion on the same day. (Doc.
#’s 175 & 176).
5. On January 12, 2012, the Committee served the subpoena. (Exhibit D,
Subpoena and Doc. # 177).
6. On January 24, 2012, Reminger conferred with Debitetto “regarding
potential claims against directors and officers, [the] subpoena relating to decisions made
by [the] directors and officers, and strategy for further case handling.” (Exhibit B, Time
Entries at p. 6).
7. On February 14, 2012, Reminger had a teleconference with Debitetto, Mr.
Grabner and Mr. Ciuni “regarding financial reclassification of assets in order to better5
understand the claims of the Committee against [the Debtor’s] directors in preparation for
further case handling and 2004 examination document production.” (Exhibit B, Time
Entries at p. 11).
8. On February 17, 2012, Reminger recorded the following time entries:
Review of cases regarding negligent misrepresentation,
privity and causes of action belonging to unsecured
creditors.
Although the parties stipulated that the date was December 15, 2012, this is the date4
stated on the exhibit
John Grabner is a director and officer of Cardinal Fastener & Speciality Co., Inc.,5
although the stipulations do not identify him as such. See Corporate Resolution at docket 1; and
Affidavit in Support of Chapter 11 Petition and First Day Motions at docket 8.
3
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Preparation of memorandum regarding review of cases.
Initial research of Ohio and Federal case law regarding
causes of action against directors and officers for
misrepresentations of financial statements. . . .
(Exhibit B, Time Entries at p. 14).
9. On February 21, 2012, the Debtor filed an “Application of Debtor . . . for
the entry of an Order Authorizing the Debtor to Retain and Employ Reminger as Special
Counsel, Nunc Pro Tunc as of the Date Filed (“Application to Employ”). (Doc. # 186).
10. Also on February 21, 2012, Reminger signed a verified declaration in
support of the Application to Employ (the “Reminger Declaration”), stating “Reminger
has agreed to advise and represent [the Debtor] … in the above-captioned chapter 11 case
in respect of the Alleged Claims.” (Doc. #186 at p. 14 ¶ 2).
11. In addition, the Reminger Declaration states:
3. Neither I, nor Reminger . . . , as far as I have been able
to ascertain after reasonable investigation, have any
connection with (a) Debtor; (b) Debtor’s executive officers,
directors, and shareholder(s); (c) the twenty (20) largest
unsecured creditors of Debtor; (d) parties to significant
litigation with Debtor; (e) Debtor’s secured creditors; or (f)
the Office of the United States Trustee (based on
Reminger’s investigation of its client lists as of the date of
this Application), nor does Reminger represent any other
known or reasonably ascertainable interest adverse to
Debtor in the matters upon which it is engaged.
4. Should Reminger discover during the pendency of the
Case that it represents, in unrelated matters, an entity or
person that has an interest adverse to Debtor in the Case,
Reminger will disclose such information to Debtor and the
Court the nature of such representation and relationship
thereto.1
n.1: To the extent that derivative claims are
asserted against the Debtor’s directors and
officers, which has not happened to date,
Reminger will revisit the scope of its
engagement herein and, if necessary,
4
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withdraw from its representation of the
Debtor in order to represent the Debtor’s
directors and officers.
(Doc. # 186 at ¶¶ 3 and 4, and n.1).
12. Paragraph 17 of the Reminger Declaration states:
17. To the extent that Reminger subsequently discovers any
facts bearing on this Verified Declaration or its
representation of Debtor, this Verified Declaration will be
supplemented and those facts will be fully disclosed to the
Court.
(Doc. #186 at ¶ 17).
13. On March 6, 2012, Reminger entered the following time entries:
Further research of Ohio case law regarding whether
directors and officers can be held personally liable for torts
committed while in the course and scope of their
employment . . . .
Further analytical review of Ohio case and statutory law
regarding personal liability of directors and officers for
torts committed while in the course and scope of
employment . . . .
Summarization of Ohio case law regarding whether
directors and officers can be held personally liable for torts
committed while in the course and scope of employment
. . . .
(Exhibit B, Time Entries at p. 16).
14. On March 21, 2012, a Reminger time entry reads: “Review cases
re[garding] potential claims against directors and officers, standing to assert them,
re[garding] potential for proceeds from Travelers[’ insurance] policy to wind up in [the]
bankruptcy estate.” (Exhibit B, Time Entries at p. 16).
15. On March 23, 2012, the Court granted the Application to Employ (Doc. #
194) (“Agreed Order”), nunc pro tunc to February 21, 2012. The Agreed Order states:
5
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3. Debtor shall and hereby is authorized and empowered to
employ Reminger as special counsel pursuant to section
327(a) of the Bankruptcy Code, effective nunc pro tunc as
of the filing of the Application, for matters related to any
and all threatened or asserted claims and causes of action
potentially covered by the Debtor’s Private Company
Directors and Officers Liability and Fiduciary Liability
Policies, and to respond on behalf of the Debtor to the
subpoena served upon the Debtor by the Official
Committee of Unsecured Creditors (the “Committee
pursuant to the Committee’s Application of the Official
Committee of Unsecured Creditors for Entry of an Order,
Pursuant to Fed. R. Bankr. P. 2004 [Docket No. 175].
(Doc. # 194 at p. 2 ¶ 3).
16. On July 18, 2012, the Court entered an order granting the Debtor’s motion
for an order converting the chapter 11 case to a case under chapter 7. (Doc. # 217).
17. On August 1, 2012, a Reminger time entry reads: “Multiple conference
with Atty. Debitetto regarding effect of Chapter 7 conversion.” (Exhibit B, Time Entries
at p. 20).
18. On August 2, 2012, a Reminger time entry reads: “Review Chapter 7
conflict and policy issues.” (Exhibit B, Time Entries at p. 21).
19. On October 18, 2012, Reminger sent a letter responding to a request from
the Trustee’s counsel to turn over its files. In pertinent part, the letter states:
You have requested that Reminger turn over its complete
file in this matter. We believe we are precluded from doing
so both legally and ethically.
* * *
While there is no doubt that Reminger was employed as
“special counsel” for the “Debtor,” a review of the Court’s
Agreed Order (ECF Doc. 194) is instructive in this matter.
While the Agreed Order states that Reminger is employed
as “special counsel,” it also states the specific purposes of
the representation, which demonstrates that Reminger was
retained to defend the interests of the Directors & Officers
(and potentially only the interest of the Directors &
Officers) against claims.
* * *
6
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In other words, based on the Agreed Order, Reminger was
employed: (1) to defend against potential claims covered
by the Travelers’ Policy (which may provide coverage to
both the Debtor and Directors & Officers, or only the
Directors & Officers); and (2) to represent the Debtor in the
limited capacity of responding to the subpoena issued by
the Committee. In light of the conversion of this matter to a
Chapter 7 bankruptcy, and in light of the fact that you have
been retained by the Trustee to represent the Debtor, it is
clear to us that there is no issue any longer as to whether we
represent Cardinal. You do, and we do not. The issue,
however, arises in the context of our engagement to
represent the Directors and Officers as individuals.
(Exhibit E, Letter dated October 18, 2012).
* * *
To these stipulated facts, the court adds that the firm did not submit a privilege log
identifying any of the disputed documents.
III. DISCUSSION
A. The Trustee’s Motion
The trustee asks that the firm be required to turn over all of its files belonging or relating
to the debtor, including unredacted copies of the debtor’s own documents, together with research
memoranda and documentation and any analysis which the firm conducted while serving as the
debtor’s special counsel. The firm now agrees to turn over the requested unredacted copies, but6
opposes the balance of the motion.
These are documents which the debtor gave to the firm so that it could respond to the6
subpoena issued by counsel for the Committee of Unsecured Creditors in connection with the
Committee’s Rule 2004 examination. The firm redacted the documents before producing them
to the Committee. The trustee has the redacted documents, but not the original documents. See
Brief in Opposition, docket 268 at p. 2.
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The trustee bases his demand on Bankruptcy Code § 542(e) and Bankruptcy Rule 2004.
Section 542(e) states that:
(e) Subject to any applicable privilege, after notice and a hearing,
the court may order an attorney, accountant, or other person that
holds recorded information, including books, documents, records,
and papers, relating to the debtor’s property or financial affairs, to
turn over or disclose such recorded information to the trustee.
11 U.S.C. § 542(e). The section expressly makes turnover subject to any applicable
privilege, which term includes the attorney client privilege and the work product doctrine. See
for example, Foster v. Hill (In re Foster), 188 F.3d 1259, 1272 (10th Cir. 1999).
Bankruptcy Rule 2004 provides that the court may order the examination of any entity on
the motion of a party in interest and may compel attendance at the examination as well as the
production of documents. FED. R. BANKR. P. 2004(a) and (c). A Rule 2004 examination may
relate “to the acts, conduct, or property or to the liabilities and financial condition of the debtor,
or to any matter which may affect the administration of the debtor’s estate . . . [and in] a
reorganization case under chapter 11 of the Code . . . may also relate to . . . any other matter
relevant to the case or to the formulation of a plan.” FED. R. BANKR. P. 2004(b). “The purpose
of a Rule 2004 examination is to assist a party in interest in determining the nature and extent of
the bankruptcy estate, revealing assets, examining transactions and assessing whether
wrongdoing has occurred.” In re Recoton Corp., 307 B.R. 751, 755 (Bankr. S.D.N.Y. 2004).
Such an examination is routinely referred to as a fishing expedition and its scope is relatively
unlimited. In re Enron Corp., 281 B.R. 836, 840 (Bankr. S.D.N.Y. 2002).
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B. The Firm’s Opposition
The firm’s analysis is two-part: (1) it acknowledges that the trustee is entitled to
unredacted copies of all of the debtor’s documents that the debtor provided to the firm; but (2)
argues that the request for documents related to the debtor encompasses documents generated by
the firm as part of its separate representation of the debtor’s directors and officers, individually.
With respect to the second category, the firm claims that the documents are privileged
communications and the firm’s work product.
C. Attorney-Client Privilege
“The attorney-client privilege protects from disclosure ‘confidential communications
between a lawyer and his client in matters that relate to the legal interests of society and the
client.’” In re Grand Jury Subpoena (United States v. Doe), 886 F.2d 135, 137 (6th Cir. 1989)
(quoting In re Grand Jury Investigation, 723 F.2d 447, 451 (6th Cir. 1983)). The privilege stems
from two ideas. “The first is that loyalty forms an intrinsic part of the relationship between a
lawyer and client in our adversary system . . ., [which] loyalty is offended if the lawyer is subject
to routine examination regarding the client’s confidential disclosures.” Reed v. Baxter, 134 F.3d
351, 356 (6th Cir.1998). “The second principle is that the privilege encourages clients to make
full disclosure to their lawyers . . . [because] [a] fully informed lawyer can more effectively serve
his client and promote the administration of justice.” Id.
The starting point is Federal Evidence Rule 501, which provides that:
The common law--as interpreted by United States courts in the
light of reason and experience--governs a claim of privilege unless
any of the following provides otherwise:
• the United States Constitution;
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• a federal statute; or
• rules prescribed by the Supreme Court.
But in a civil case, state law governs privilege regarding a claim or
defense for which state law supplies the rule of decision.
FED. R. EVID. 501 (made applicable by FED. R. BANKR. P. 9017). Under this rule, federal
common law determines the scope of the privilege when the underlying claim is based on federal
law. Reg’l Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 712 (6th Cir. 2006). That is
the case here where the trustee made his production demand under the Bankruptcy Code and
Rules. Consequently, the common law as interpreted by the federal courts governs the firm’s
claim of privilege. In re Foster, 188 F.3d at 1264-65; In re Hotels Nevada, LLC, 458 B.R. 560,
569-70 (Bankr. D. Nev. 2011); French v. Miller (In re Miller), 247 B.R. 704, 708 (Bankr. N. D.
Ohio 2000).
The elements of the attorney-client privilege under federal common law “are as follows:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity
as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client,
(6) are at his instance permanently protected (7) from disclosure by himself or by the legal
adviser, (8) unless the protection is waived.” Reed v. Baxter, 134 F.3d at 355-56. The client is
the only party entitled to invoke the privilege. In re Antitrust Grand Jury, 805 F.2d 155, 163 (6th
Cir. 1986). The party invoking the privilege bears the burden of establishing its existence.
United States v. Dakota, 197 F.3d 821, 825 (6th Cir. 1999).
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1. Who did the Firm Represent?
The firm acted as special counsel to the debtor. Clearly, an attorney client privilege
existed between the debtor and the firm; it is equally clear that the trustee now controls the
privilege that formerly belonged to the corporate debtor. See Commodity Futures Trading
Comm’n v. Weintraub, 471 U.S. 343 (1985). The trustee has waived the privilege, which waiver
extends to any privileged communications between the firm and the debtor’s officers and
directors that were made as part of that representation. In re Fid. Guarantee Mortgage Corp.,
150 B.R. 864, 867-68 (Bankr. E.D. Mass. 1993). Therefore, it seems that the firm must turn over
the requested documents.
The firm, however, argues that it had two separate representations: one in which it
represented the directors and officers individually and another in which it represented the debtor
on a limited basis. The firm contends that it only represented the debtor in connection with the
subpoena issued by the Committee to obtain documents for its Rule 2004 examination;
conversely, it argues that it did not represent the debtor on issues related to the Traveler’s D & O
insurance coverage.
The court notes that the firm’s analysis skips what should be the first step: the firm
identifies its alleged individual clients by name and shows that each asserts the privilege. That
evidence is missing here.
If one moves beyond that fundamental problem, the next obstacle to the firm’s position is
that it contradicts the language of the application through which the firm sought retention, as well
as the order authorizing that retention. The application and the order state that the firm was
being retained as the debtor’s counsel with respect to both matters. Consequently, the debtor was
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the firm’s client with respect to both matters. As the client, the debtor was the party entitled to
assert the attorney-client privilege with respect to its communications with the firm.
There is no evidence to support the firm’s assertion that it represented any individual
officer or director. While the firm’s brief states that Travelers selected the firm to defend the
directors and officers individually with respect to any claims possibly covered by the insurance as
a consequence of the Committee’s November 14, 2011 demand letter, that statement is not7
evidence and the stipulated facts do not show that there was an individual representation. The
firm specifically stated in its February 21, 2012 declaration submitted in connection with its
retention as debtor’s special counsel that the firm did not have any connection with the directors
and officers based on an investigation of the firm’s client lists. Additionally, the exhibits8
provided with the stipulations, such as the firm’s billing statements, do not identify the directors
and officers as clients. And, finally, the firm has not identified any specific documents which it
prepared on behalf of the directors and officers as individuals. See FED. R. BANKR. P. 7026
(made applicable by FED. R. BANKR. P. 9014(c)) (incorporating FED. R. CIV. P. 26(b)(5)(A)).
2. Alternatively, if the Firm did represent both the debtor and, individually,
the officers and directors, can the officers and directors assert privilege
against the trustee?
Even if the firm did represent both the debtor and the individual directors and officers in
connection with alleged and potential claims covered by the insurance, the rules relating to an
attorney representing two clients on a matter of common interest would require the firm to
comply with the trustee’s request.
Docket 268 at 4.7
Docket 186, Exh. A at ¶ 3.8
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“Under the joint-client privilege, clients may jointly retain (or one client may retain for
the benefit of others) an attorney as their common agent on a legal matter of common interest.
With respect to matters of common interest, each joint client may be privy to the other’s
communications with the attorney without the attorney-client privilege protection being waived
by that breach of confidentiality.” In re Hotels Nevada, LLC, 458 B.R. at 570; see also In re
Teleglobe Comm’ns Corp., 493 F.3d 345, 363 (3d Cir. 2007) (“When co-clients and their
common attorneys communicate with one another, those communications are ‘in confidence’ for
privilege purposes. Hence the privilege protects those communications from compelled
disclosure to persons outside the joint representation.”); Grand Trunk Western R. Co. v. H.W.
Nelson Co., 116 F.2d 823, 835 (6th Cir.1941) (same); RESTATEMENT (THIRD) OF THE LAW
GOVERNING LAWYERS § 75(1) (2000).
As the trustee points out, the established rule is that joint clients who have employed an
attorney as their common agent with respect to a matter may not assert the privilege in later
litigation between the joint clients. In re Hotels Nevada, LLC, 458 B.R. at 570; In re Ginn-La St.
Lucie Ltd., 439 B.R. 801, 804-5 (Bankr. S.D. Fla. 2010); see also In re Teleglobe Comm’ns
Corp., 493 F.3d at 366; Grand Trunk Western R. Co., 116 F.2d at 835; RESTATEMENT (THIRD)
OF THE LAW GOVERNING LAWYERS § 75(2) (2000). One court noted:
The attorney-client privilege protects joint client communications
from discovery by third parties. Among joint clients, however, the
privilege may not be used either to restrict access to, or to preclude
use of communications between the attorney and the clients that
relate to those matters in which they had a common interest and
about which they collectively consulted the attorney.
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Brownsville Gen. Hosp., Inc. v. Brownsville Prop. Corp. (In re Brownsville Gen. Hosp., Inc.),
380 B.R. 385, 390 (Bankr. W.D. Pa. 2008). This exception has been applied in the context of a
§ 542(e) turnover request. In re Hotels Nevada, LLC, 458 B.R. 572-73; see also Sec. Investor
Prot. Corp. v. Stratton Oakmont, Inc., 213 B.R. 433, 439-40 (Bankr. S.D.N.Y. 1997) (stating that
the exception applies where a trustee is conducting an investigation to identify claims).
If the firm did in fact represent both the debtor and the directors and officers,
individually, with respect to potential claims related to the insurance in the chapter 11 case, their
legal interests were aligned at that point. There is no evidence that the directors and officers
consulted the firm separately on a matter in which they did not share a common interest with the
debtor. Therefore, the representation would necessarily have been a joint one. In that
circumstance, the officer and director communications with the firm would not be privileged as
to the debtor.
D. The Work Product Doctrine
The firm also invokes the work product doctrine, which doctrine “ protects an attorney's9
trial preparation materials from discovery to preserve the integrity of the adversarial process.” In
re Prof’ls Direct Ins. Co., 578 F.3d 432, 438 (6th Cir. 2009) (citing Hickman v. Taylor, 329 U.S.
495, 510-14 (1947)). “Work product consists of the tangible and intangible material which
reflects an attorney's efforts at investigating and preparing a case, including one's pattern of
investigation, assembling of information, determination of the relevant facts, preparation of legal
The firm did not identify any particular documents as work product. Given that the9
firm has the burden of proof, this alone would justify ruling against the firm on this point.
Nevertheless, for the sake of resolving the dispute at one time, the court will assume that at least
some of the documents can be characterized as work product.
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theories, planning of strategy, and recording of mental impressions.” In re Grand Jury Subpoena
Dated Nov. 8, 1979, 622 F.2d 933, 935 (6th Cir. 1980). The purpose of the work product
doctrine “is to allow an attorney ‘to assemble information, sift what he considers to be the
relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue
and needless interference . . . to promote justice and to protect [his] clients’s interests.’” In re
Powerhouse Licensing, LLC, 441 F.3d 467, 473 (6th Cir. 2006) (quoting Hickman v. Taylor, 329
U.S. 495, 510 (1947)).
The work product doctrine is distinct from the attorney-client privilege; it is a procedural
rule of federal law which is governed here by Federal Rule of Civil Procedure 26. See In re10
Prof’ls Direct Ins. Co., 578 F.3d at 438 (citing In re Powerhouse Licensing, LLC, 441 F.3d 467,
472 (6th Cir. 2006)); see also In re Elkins, No. 05-65317, 2012 WL 4327044 at *3 (Bankr. N.D.
Ohio Sept. 20, 2012). Civil Rule 26(b)(3) protects “(1) documents and tangible things; (2)
prepared in anticipation of litigation or for trial; (3) by or for another party or its representative.”
Prof’ls Direct Ins. Co., 578 F.3d at 438 (citation and quotation marks omitted). “Once the party
requesting discovery establishes relevance, the objecting party has the burden of showing that the
material was ‘prepared in anticipation of litigation or for trial.’” In re Powerhouse Licensing,
LLC, 441 F.3d at 473 (quoting Toledo Edison Co. v. G.A. Tech., Inc., 847 F.2d 335, 339 (6th Cir.
1988)). Both the attorney and the client may invoke the doctrine. In re Antitrust Grand Jury,
805 F.2d at 163.
Rule 26 applies here under Federal Bankruptcy Rules 9014(c) and 7026, which10
incorporate Federal Civil Rule 26 with exceptions not relevant here.
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The firm’s argument regarding the work product doctrine evolved as the briefing of this
matter progressed. Initially, the firm appeared to argue that it could assert the doctrine as a
reason to withhold giving the debtor’s work product to the trustee. That argument is ineffective:
the work product doctrine generally does not apply in situations where it is the client asking for
access to documents and information created or collected by his counsel during the course of the
representation. The trustee in this case has stepped into the shoes of the debtor and is the client
for these purposes; the work product doctrine cannot be asserted against him. See In re
Equaphor Inc., No. 10-20490, 2012 WL 1682583 at *5 (Bankr. E.D. Va. May 14, 2012)
(collecting cases); see also RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 90
cmt. c (2000) (“When lawyer and client have conflicting wishes or interests with respect to
work-product material, the lawyer must follow the instruction of the client.”).
In later briefing, the firm acknowledged that the trustee may be entitled to work product
related to the debtor, but argues that he is not entitled to its work product related to claims
threatened against the directors or officers. This argument also fails because, as noted above,11
the stipulated facts do not support the firm’s assertion that it represented the directors and
officers individually. Even if that had been the case, any work product was necessarily for the
joint benefit of the debtor and the directors and officers rather than for another party or its
representative, as those terms are used in Civil Rule 26(b)(3). Bartholomew v. Avalon Capital
Grp., Inc., 278 F.R.D. 441, 451 (D. Minn. 2011). Moreover, to the extent the work product
relates to the joint representation, the work product doctrine would not permit the firm to deny
access to its joint client, the debtor. The trustee now holds that position and is similarly entitled
Supplemental Brief in Opposition at p. 6, docket 276.11
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to the documents. See In re Michigan Boiler & Eng’g Co., 87 B.R. 465, 469 (Bankr. E.D. Mich.
1988).
IV. CONCLUSION
For the reasons stated, the firm failed to prove that any documents are protected either by
the work-product doctrine or the attorney-client privilege. The trustee’s motion is granted. The
firm is ordered to produce and turn over the requested documents within 7 days after the date on
which this order is entered.
IT IS SO ORDERED.
__________________________________
Pat E. Morgenstern-Clarren
Chief Bankruptcy Judge
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11-15719-aih Doc 282 FILED 02/04/13 ENTERED 02/04/13 11:15:13 Page 17 of 17