Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Bankruptcy Court Highlights Pitfalls to Avoid When Retaining Experts

By Francis J. Lawall and Marcy J. McLaughlin Smith
July 01, 2023

The retention of an expert is obviously common and essential in many litigation scenarios. However, simply because the expert is retained by counsel in anticipation of litigation, does not automatically render all communications privileged. This is generally true whether the litigation is pending in a bankruptcy or nonbankruptcy proceeding. Therefore, the terms of an expert's retention, as well any decision as to what information is disclosed must be carefully considered in advance. A recent decision by the Bankruptcy Court for the Northern District of Texas, Northwest Senior Housing v. Intercity Investment Properties (In re Northwest Senior Housing), 2023 Bankr. LEXIS 1001 (Bankr. N.D. Tex. 2023), addressed these important issues involving the retention of a public relations firm and highlights some important pitfalls to avoid.

Northwest Senior Housing Corp., a Chapter 11 debtor, brought an adversary proceeding that asserted that certain disclosures made by the defendants violated a nondisclosure agreement between the parties. Pre-petition, the defendants' counsel entered into a consulting agreement with a public relations firm (the PR firm), which contemplated the provision of public relations advice in connection with anticipated litigation with the debtor.

Within the adversary, the debtor sought discovery from the defendants and the PR firm related to communications and documents exchanged between them. The defendants and PR firm asserted privilege and refused to produce, resulting in the debtor filing a motion to compel. The bankruptcy court determined that there were two key issues: 1) whether the attorney-client privilege applied between the PR firm and the defendants based on the PR firm's retention by the defendants' counsel; and 2) whether the consulting-expert privilege applied to protect the communications from production. Finding that neither privilege applied, the bankruptcy court ordered production.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

The Benefits of Blockchain for e-Discovery and Data Preservation Image

As businesses across various industries increasingly adopt blockchain, it will become a critical source of discoverable electronically stored information. The potential benefits of blockchain for e-discovery and data preservation are substantial, making it an area of growing interest and importance.