A corporate client’s bankruptcy can put its decision-making power over privilege assertion and waiver into the hands of a trustee, receiver or other legal successor. But what if a corporate client goes totally defunct?
In Utah Physicians for a Healthy Environment, Inc. v. Diesel Power Gear, LLC, defendant DPG shut down operations and filed “articles of dissolution” in January 2024. Case No. 2L17-cv-32-RJS-DBP, 2025 U.S. Dist. LEXIS 145298, at *4 (D. Utah July 29, 2025). A plaintiff attempting to collect on a judgment against DPG and others sought documents from the law firm that had represented DPG. After questioning the law firm’s objections and discovery responses, the court focused on what seems like a dispositive legal doctrine — quoting another opinion in holding that “a dissolved or defunct corporation retains no privilege.” Id. at *5 (citation omitted). Most, but not all, courts take that approach.
Because lawyers’ duty of confidentiality lasts forever, presumably they must at least pro forma resist discovery — even though that private duty does not protect communications from discovery when there is no client on whose behalf the lawyers can claim privilege. Such lawyers might understandably worry when forced to turn over their documents about a teetering corporate client’s last desperate attempts to stay alive — especially to plaintiffs that may seek other deep pockets after a corporate target has disappeared.