Application of the Common-Interest Doctrine in Bankruptcy Proceedings

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The common-interest doctrine permits separately represented parties to share information without waiving privilege protections and has particular relevance in bankruptcy proceedings, where the various constituencies often have both common and adverse interests. The process typically works best when both parties cooperate and work through their differences to arrive at a consensual resolution of the case. The U.S. Bankruptcy Court for the District of Delaware recently extended the common interest doctrine to pre-petition communications between the debtor and an informal committee of claimants in In re Leslie Controls Inc.

The common-interest doctrine is not a privilege itself; it applies only if the communications fall within the scope of an established privilege and it merely expands who may have access to the communications at issue without the privilege being lost. The attorney-client privilege developed over time out of a recognized need to “encourage full and frank communications between attorneys and their clients.” On the other hand, since the privilege precludes the discovery of potentially relevant information, courts look to strike a balance between protecting privileged communications and the goal of full disclosure of all relevant facts. The privilege generally remains intact until it has been breached or waived, which most commonly occurs when information is disclosed to third parties.

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Cole Schotz on:

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