The vast majority of courts hold that neither the attorney-client privilege nor the work product doctrine protects communications to or from a company’s investment banker. On the other hand, communications to or from (and materials created by) specially retained litigation-related non-testifying experts normally enjoy immunity from any discovery. Given this enormous contrast, companies must be very careful when asking the same adviser to play both roles.
In Hexion Specialty Chemicals, Inc. v. Huntsman Corp., C.A. No. 3841-VCL, 2008 Del. Ch. LEXIS 118 (Del. Ch. Aug. 22, 2008), defendant Huntsman hired Merrill Lynch as an investment banker in October 2005. In June 2008, Huntsman arranged for Merrill Lynch to also serve as the company’s non-testifying litigation expert. The court explained that “Huntsman had both the time and the occasion to ask Merrill Lynch to form a separate team of litigation consultants” in which case “Merrill Lynch might then have maintained adequate internal controls to prevent the fact witnesses serving on the investment banking team from gaining knowledge of the litigation consultant team’s work.” Id. at *8-9. However, the court cited a key Merrill Lynch witness’s admission of “having trouble differentiating between Merrill Lynch’s dual roles.” Id. at *4 n.3. The court ultimately denied the otherwise available protection for the Merrill Lynch employees hired to act as Huntsman’s non-testifying experts “due to Huntsman’s failure to make any meaningful effort to distinguish between Merrill Lynch’s dual roles.” Id. at *11.
Companies considering using the same adviser in both generally protected and generally unprotected roles must assure that the adviser screens its employees playing the different roles.