Beware: Not All Communications Between Court-Appointed Bankruptcy Professionals Are Privileged

Many bankruptcy attorneys assume that otherwise privileged communications that are shared with non-attorney professionals are privileged, or that the disclosure of such privileged information in the presence of non-attorney professionals will not result in the waiver of any applicable privilege. However, where a communication otherwise protected by the attorney-client privilege is disclosed to, or made in the presence of a third party, the communication may no longer be, or deemed never to have been considered privileged. See, e.g., Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1424 (3d Cir. 1991) (“voluntary disclosure to a third party of purportedly privileged communications has long been considered inconsistent with an assertion of the privilege.”). This raises significant issues in the bankruptcy context, where bankruptcy attorneys regularly exchange information with other court-appointed professionals who are not their clients or employees of their law firms.

The disclosure of an attorney's work product to a third party “does not necessarily waive the protection of the work-product doctrine,” since it is “only in cases in which the material is disclosed in a manner inconsistent with keeping it from an adversary that the work-product doctrine is waived.” In re Chevron Corp., 633 F.3d 153, 165 (3d Cir. 2010). In other words, to the extent litigation is anticipated, the work product doctrine would apply to protect against the disclosure of documents revealing attorney strategy, even if the document had been provided to or created by an adviser acting at the committee's direction. Fed. R. Civ. P. 26(b)(3)(A) (protecting “documents ' prepared by another party or its representatives ' .”).