Recent Decision Spotlights Privilege Issues In M&A Transactions

Can information a seller shares with counsel on corporate servers during the course of M&A transactions be used against them after closing of the deal?

A recent decision by the Ontario Superior Court of Justice underscores the importance of considering solicitor-client privilege when negotiating M&A transactions.

What Happened in the Case

In Dente et al. v. Delta Plus Group et al. (Dente)¹, the Court reviewed and applied key principles governing solicitor-client privilege after the closing of an M&A transaction. The case involved a lawsuit that arose two years after a selling group, the "Dentes", sold their corporate interests in a couple of target companies (the "Target Companies") to Delta Plus Group pursuant to a Share Purchase Agreement. During negotiations and preparation of the Share Purchase Agreement, the Dentes retained the services of a solicitor ("M&A counsel") they had used for years for personal and business matters, though it was not made clear