Last week’s Privilege Point addressed a lawsuit involving an asset purchase agreement (APA) under which Jim Daws sold his company, Jim Daws Trucking, to Rick Fernandez. Addressing Daws’ pre-closing privileged communications with his lawyers, the court noted that the APA transferred “all the tangible and intangible assets” and specifically mentioned, and even valued, the server that contained Daws’ communications with his lawyer. Jim Daws Trucking, LLC v. Daws Inc., No. 4:24CV3177, 2025 U.S. Dist. LEXIS 186458, at *3 (D. Neb. Sept. 23, 2025) (internal citation omitted). The court held that Daws had waived his privilege by transferring the server.
Because Daws kept working at the company after the closing, the court also addressed ownership of his communications after he and Fernandez had a falling out. When Fernandez checked the server, he found communications “between Jim and his attorneys” (who had also represented Fernandez in the transaction) working to create a “mass resignation of employees” with the hope that “Jim could reacquire [the company] for far less than he sold it.” Id. at *7 (internal citation omitted).
Using the widely adopted multifactor test articulated in In re Asia Global Crossing, Ltd 322, B.R. 247, 255 (Bankr. S.D.N.Y. 2005), the court gave Daws another dose of bad news — the privilege didn’t protect his post-closing communications with his lawyers either. It is unclear whether the law firm that represented both sides in this transaction advised Daws about protecting his pre-closing and post-closing privilege communications. All transactional lawyers should heed the lessons.