25 Oct Attorney-Client Privilege Not Eroded By Textron Case
An attorney’s work product was outside the attorney-client privilege and therefore not confidential when it was used to produce financial statements required by the Internal Revenue Service, said the First Circuit last May in United States v. Textron. I do not believe that this will apply in bankruptcy circumstances.
The bankruptcy process begins with you presenting information and documents to your attorney so s/he can prepare the bankruptcy filings. The attorney works diligently on them, perhaps sharing revisions with you on the way to reaching final versions. This reflects the attorney’s work product. It is, and it should be, heldconfidential as part of the overall communications of the attorney-client relationship as previously discussed by my colleague Craig Andreson.
The First Circuit, in its 3-2 decision, ruled that the work product doctrine was limited to work product in anticipation of litigation, and not applicable to product for preparing required financial statements, despite the obvious fear that the IRS might contest the statements and litigate their accuracy – making the work product “in anticipation of litigation”.
The Textron dissent was harsh and vigorous. It invited Supreme Court review (which was not requested).
I am confident that this ruling will not apply to bankruptcy work. The court emphasized its belief that the work product being considered was for a regulatory requirement and therefore a public corporation’s ordinary course of business, as opposed to an anticipation of litigation.
With bankruptcy, (1) there’s certainly nothing ordinary about the work and (2) the final product is directed to a court of law, not to a regulatory agency. Courts, as we know, is where litigation takes place.
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