Saturday, April 13, 2013

Tekni-Plex, Inc. v. Meyner & Landis case brief

Tekni-Plex, Inc. v. Meyner & Landis case brief summary
89 N.Y.2d 123, 674 N.E.2d 663, 651 N.Y.S.2d 954 (1996)

The former shareholder of the prior corporation as well as the law firm that represented the corporation sought review of a decision by the Appellate Court of NY.
The court had affirmed that granting of a motion by the new corporation which would disqualify the law firm from representation of the shareholder in any action against the corporation.

A law firm represented the older corporation environmental (as well as other) matters.
The sold shareholder of the old corporation sold its assets to the new corporation.
The new corporation continued its business.
When a dispute arose that concerned environmental misrepresentations by the shareholder out of the acquisition, the new corporation sought a disqualification.

The court applied a three-part test, and held that the law firm should be disqualified from representing the shareholder.

The court held that the authority to assert the attorney-client privilege passed to the new corporation regarding communications between the former corporation and the law firm on matters of environmental compliance.
The court held that the law firm should be enjoined from disclosing the environmental-related communications to the shareholder.
The court directed the law firm to give related files to the new corporation.
The new corporation did not control the attorney-client privilege with regard to communications that concerned the acquisition.
The new corporation was entitled to the law firm's confidential communications that concerned its representation of the old corporation with regard to the acquisition.

The court affirmed the order of the appellate division.
The court modified the order to allow the shareholder to retain the attorney-client privilege for matters that had to do with the acquisition of the old corporation by the new corporation.

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