Lawyers Sued by Subsidiary Must Spill Parent’s Secrets

Lawyers accused of helping a Canadian energy company loot a U.S. subsidiary must provide the subsidiary’s bankruptcy trustee with privileged communications among lawyers and the parent corporation’s executives, a federal judge in Delaware held Dec. 12.

The ruling addressed a question for which there is no controlling authority in Delaware: If a lawyer represents joint clients A and B, and later is sued by just joint client A, must the lawyer hand over to A the otherwise discoverable but privileged communications he had with B?

U.S. District Judge Richard G. Andrews said the answer to that question is “yes.”

And ...