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waive. A growing trend holds that the trustee's power to waive the attorney-client privilege
depends on the facts and circumstances of the case. As one court analyzed the cases, the
individual debtor alone should hold privilege waiver power when potential harm to or control over his person may exist from a disclosure; the trustee should hold waiver power when he is only seeking to discover and recover assets for the estate. And as the Tenth Circuit noted, that means the court must actually analyze the harm to the debtor and balance it against the trustee's need for information. An additional theory to support a waiver argument may be found in the DIP's obligation to exercise the privilege in a manner consistent with his fiduciary duties, which may include duties to pursue causes of action against the DIP's personal interests. When postpetition communications are at issue, the court should evaluate whether they were made with the DIP in its DIP capacity (most communications - waivable by the trustee), or in its debtor capacity (limited principally to plan proposals - not waivable).
3. It is not uncommon for a single firm to represent both a corporation and its individual officers or directors. The corporate debtor's privilege may be waived by its bankruptcy trustee, while the individual may retain the right to assert the privilege on her own behalf. In order to assert such a privilege, the individual must establish there existed an attorney-client relationship with her as an individual.
1. The creditors' committee has generally been held entitled to assert
This outline is adapted from Chapter 27, Ethical Responsibilities, Norton Bankruptcy Law & Practice 2d (Thomson-West 2005)
