Buttonwood Tree Value Partners, L.P. v. R.L. Polk & Co., Inc. ( 2021 )

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
BUTTONWOOD TREE VALUE )
PARTNERS, L.P., a California Limited )
Partnership, and MITCHELL PARTNERS )
L.P., a California Limited Partnership, )
)
Plaintiffs, )
)
v. ) C.A. No. 9250-VCG
)
R. L. POLK & CO., INC., STEPHEN R. )
POLK (individually and on behalf of a )
Defendant Class of similarly situated )
persons), THE ESTATE OF NANCY K. )
POLK, KATHERINE POLK OSBORNE, )
DAVID COLE, RICK INATOME, )
CHARLES MCCLURE, J. MICHAEL )
MOORE, RLP & C HOLDING, INC., )
RLP MERGER CO., STOUT RISIUS )
ROSS, INC., and HONIGMAN MILLER )
SCHWARTZ AND COHN LLP, )
)
Defendants. )
MEMORANDUM OPINION
Date Submitted: April 15, 2021
Date Decided: July 30, 2021
R. Bruce McNew, of COOCH AND TAYLOR, P.A., Wilmington, Delaware,
Attorney for Plaintiffs.
David A. Dorey, of BLANK ROME LLP, Wilmington, Delaware; OF COUNSEL:
Christopher M. Mason, of NIXON PEABODY LLP, New York, New York, and
Carolyn G. Nussbaum, of NIXON PEABODY LLP, Rochester, New York, Attorneys
for Defendants.
GLASSCOCK, Vice Chancellor
In the twenty-odd years I have been a judicial officer in Chancery, the docket
has moved in the direction of contractual disputes and what were once quaintly
called alternative entity disputes. Those cases tend to require an intense focus on
factual issues, which in turn makes discovery disputes a larger portion of the issues
submitted for decision. That fact, coupled with the increased caseload in general,
has led to an episodic use of Special Masters to advise the court in labor-intensive
matters such as in-chambers document reviews. The employment of such Special
Masters is, in my view, at times near-indispensable given the current litigation
burden on the Court.
Special Masters are a blessing, but like all blessings in this imperfect world,
mixed.1 For litigants, there is a time and expense burden. For the Court, using
Special Masters requires reviewing their findings de novo. This matter, while a
traditional corporate equity matter, has posed unique and extensive discovery
disputes that I referred to a Special Master; I must now pay the piper in the form of
the following de novo review.
At issue is the thorough and thoughtful Final Report of the Special Master
dated November 23, 2020. Both parties have taken limited exceptions to the Final
Report. Upon review of the exceptions, I reach largely the same conclusions as did
1
In the words of the great science-fiction philosopher Robert Heinlein, “There ain’t no such thing
as a free lunch.” See generally Robert Heinlein, The Moon is a Harsh Mistress (1966).
1
the Special Master, with a single exception. As to matters in the Final Report to
which no exception was taken, after a review de novo I adopt those portions of the
Final Report as a decision of this Court.2 My reasoning follows.
I. BACKGROUND 3
A. The Parties and Relevant Non-Parties
Non-party R. L. Polk and Co., Inc. (“Polk Co.” or the “Company”) is a
Delaware corporation with its headquarters in Michigan. 4 The Company was
formerly a named defendant; I dismissed it from this matter at Oral Argument on
May 31, 2017. 5
Defendant Stephen Polk (“Stephen”)6 is the great-grandson of the Company’s
founder and has been a member of the Company’s Board of Directors (the “Board”)
2
The Final Report consists of a description of and application of law to hundreds of documents,
privilege for which is disputed. They were individually reviewed by the Special Master, in camera.
The tedium of such a review should not be underestimated, and I thank the Master for his service
in this matter, which must have at times resembled the task that Thoreau earnestly urged be
avoided; counting the cats in Zanzibar. I am also thankful, as should be the reader, that the nature
of the exceptions allowed for a more categorical and less granular approach in this Memorandum
Opinion.
3
Unless otherwise noted, my description of the facts in this Background section is provided for
context and does not reflect any binding factual determinations. Nor do I address the merits of
any underlying claims in this dispute. My role is to review, de novo, the Special Master’s
conclusions with respect to privilege. Citations in the form JA __, SDM-__ are to the Joint
Appendix submitted by the parties with the Defendants’ Opening Brief in support of their
exceptions to the Final Report. See Ex. to App. of Opening Br. in Supp. of Defs.’ Notice of
Exceptions to the Special Discovery Master’s Final Report of November 23, 2020, Dkt. No. 272.
4
Buttonwood Tree Value Partners, L.P. v. R.L. Polk & Co., Inc., 2017 WL 3172722, at *1 (Del.
Ch. July 24, 2017) [hereinafter Buttonwood II].
5
Id.; see also Tr. of Oral Arg. on Defs.’ Mots. to Dismiss and Partial Rulings 97:13–97:14, Dkt.
No. 196.
6
I refer to the Defendant by his first name, not out of any disrespect, but for the avoidance of
confusion with other persons and entities discussed in this Memorandum Opinion. The Second
2
since 1984.7 At all times relevant to this action he was Chairman of the Board and
the Company’s Chief Executive Officer (“CEO”) and President.8 Former defendant
Nancy K. Polk is his sister-in-law and defendant Katherine Polk Osborne is his
niece. 9
The Estate of Nancy K. Polk was substituted in place of the deceased Nancy
K. Polk (“Nancy”) as a defendant in this action in 2019.10 Nancy was member of
the Board at all times relevant to this matter. 11
Defendant Katherine Polk Osborne (“Katherine”) was a member of the Board
at all times relevant to this matter. 12
Non-party Honigman Miller Schwartz & Cohn LLP (“Honigman”) is a law
firm that served as outside counsel to the Company in connection with several of the
transactions at issue in the Amended Complaint. 13 Honigman was formerly a named
Amended Complaint (the “Amended Complaint”) purports to name Stephen a defendant in his
individual capacity and “on behalf of a Defendant Class of similarly situated persons.” Second
Am. Verified Class Action Compl. 1, Dkt. No. 155 [hereinafter “Am. Compl.”]. The Amended
Complaint describes the alleged class as members of the Polk family who owned shares of the
Company and “agreed to act as a block to exercise control over the Company.” Am. Compl. ¶ 15.
The Amended Complaint refers to this class as either the “Controlling Shareholders” or the “Polk
Family Class.” Id. No party has yet moved for class certification in this action. Accordingly, for
purposes of this Memorandum Opinion, the Plaintiffs and Defendants herein are such solely in
their individual capacities and not on behalf any class. See generally Ct. Ch. R. 23.
7
Buttonwood II, 2017 WL 3172722, at *2.
7
Id.8
Id.9
Id.10
Order Substituting the Estate of Nancy K. Polk, Dkt. No. 240.
11
Buttonwood II, 2017 WL 3172722, at *2
12
Id.13
Id.; see also Aff. of Donald J. Kunz, Esq. Dkt. No. 257 [hereinafter “Kunz Aff.”].
3
defendant in this action but was dismissed by my previous Memorandum Opinion
of July 24, 2017. 14 The Plaintiffs allege that Honigman simultaneously served as
counsel to the Company, to members of the Polk family, and to other entities
affiliated with the Company or the Polk family.15
Plaintiff Buttonwood Tree Value Partners, L.P. (“Buttonwood”) is a
California limited partnership that held shares in the Company at all relevant times
and participated in the 2011 Self-Tender, as defined below. 16 Plaintiff Mitchell
Partners L.P. (“Mitchell”) is also a California limited partnership that held shares in
the Company at all relevant times and participated in the 2011 Self-Tender. 17 The
Plaintiffs purport to bring this action on behalf of themselves and all others similarly
situated.18
B. Facts Leading to this Litigation
In their Amended Complaint, the Plaintiffs allege that the Company’s
controlling stockholders—and specifically Stephen—breached their fiduciary duties
to the minority by inducing them to sell their shares for an inadequate price in a self-
tender transaction in 2011 (the “2011 Self-Tender”) that enriched the Polk family at
14
Buttonwood II, 2017 WL 3172722, at *9, *11 (Del. Ch. July 24, 2017).
15
Am. Compl. ¶ 25, Dkt. No. 155.
16
Buttonwood II, 2017 WL 3172722, at *1.
17
Id.18
Id.4
the Plaintiffs’ expense. 19 After the transaction, the purported controllers received
dividends amounting to one-third of the self-tender price. 20 The Company was later
acquired for three times the self-tender valuation.21 In describing the self-tender to
its stockholders, the Company allegedly failed to disclose several material facts,
including that members of the Polk family had been considering a sale of the
company for some time. 22
1. The Company Explores its Options
In 2007 and 2008, the Board of Directors of Polk Co. (the “Board”)
considered, but did not proceed with, a potential share repurchase, or self-tender.23
The parties do not dispute that Honigman advised the Company in connection with
the contemplated self-tender. 24 The Plaintiffs argue that the Defendants had a
conflict of interest with respect to the transaction, which “was instigated at the
request of the Polk family, and was structured to assure that the Polk family
19
Buttonwood Tree Value Partners, L.P. v. R.L. Polk & Co., Inc., 2018 WL 346036, at *1 (Del.
Ch. Jan. 10, 2018) [hereinafter Buttonwood III].
20
Id.21
Id.22
Id.23
Special Discovery Master’s Final Report and Recommendation after In Camera Review of
Certain Documents Withheld on Grounds of Privilege 4, Dkt. No. 263 [hereinafter “Final Report”].
24
See, e.g., Pls.’ Opening Br. in Supp. of their Exceptions to the Final Report 14, Dkt. No. 270
[hereinafter “Pls.’ Opening Br.”]; Br. in Opp’n to Pls.’ Exceptions 4, Dkt. No. 274 [hereinafter
“Defs.’ Answering Br.”].
5
maintained 90% control, preserving their ability to engage in a short-form merger
with its attendant legal benefits.”25 This transaction never occurred, however. 26
The Company again considered strategic transactions in 2010, including
restructuring as a Subchapter S corporation, possibly via a short-form merger.27 In
connection with this potential transaction, the Company again sought the advice of
Honigman.28 Honigman also consulted with Delaware counsel, Morris Nichols
Arsht & Tunnell LLP (“Morris Nichols”).29 The Plaintiffs characterize this
transaction as another attempt by members of the Polk family to maintain their
control of the Company.30
In November 2010, the Board appointed a sub-committee of directors that
were not members of the Polk family (the “Special Committee”) to evaluate this
option further on the Company’s behalf. 31 In December 2010, the Special
Committee retained Morris Nichols to advise the Company. Shortly prior,
Honigman also formed a shell entity, RLP&C Holding, Inc. (“Holding Co.”), that
25
Pls.’ Opening Br. 5–6.
26
Per the Defendants, economic events in 2008 caused the Company to change course. See, e.g.,
Answer 36–37, Dkt. No. 202.
27
Final Report 4.
28
Id.29
See, e.g., id. 24.
30
Pls.’ Opening Br. 6 (noting that the “objective” of this transaction “was the elimination of all
shareholders who were not Polk family members”).
31
Final Report 4. Per the Amended Complaint, the Company’s ownership structure likely
prevented it from electing Subchapter S status at this time, because it had more than 100
stockholders. However, “[o]ne way to reduce the number of shareholders in a corporation is to
effectuate a short-form merger.” Am. Compl. ¶ 52.
6
could serve as a holding company if the Company decided to pursue a short-form
merger. 32 Honigman planned to represent Holding Co. if that proceeded.33
However, no merger ever occurred.34
2. The 2011 Self-Tender
The Company ultimately completed the 2011 Self-Tender in March 2011.35
Honigman again advised the Company in connection with the 2011 Self-Tender.36
Per the Plaintiffs, the 2011 Self-Tender (like that contemplated in 2008) was
instigated by Stephen to allow family members to sell their shares without sacrificing
the family’s control of the Company. 37
3. The Sale of the Company
In June 2013, non-party IHS Inc. acquired all outstanding shares of the
Company in a two-step merger.38 In December 2012, the Board had declared what
the Plaintiffs describe as “an extraordinarily high” special dividend.39
C. This Litigation
The Plaintiffs initiated this action in 2014, alleging breaches of fiduciary duty
against officers and directors of the Company in connection with the 2011 Self-
32
Final Report 4.
33
Id.
34
Id.
35
Id.
36
Id.
37
Pls.’ Opening Br. 6; see also Buttonwood II, 2017 WL 3172722, at *4 (Del. Ch. July 24, 2017).
38
Final Report 4.
39
Buttonwood II, 2017 WL 3172722, at *5 (quoting Am. Compl. ¶ 89).
7
Tender and the subsequent merger.40 The Plaintiffs have since amended the
complaint twice, most recently on December 19, 2016. 41
1. The Motion to Dismiss
My previous Memorandum Opinion of July 24, 2017 dismissed several
defendants from the case, holding that the Amended Complaint stated claims against
Stephen, Nancy, and Katherine for breaches of their fiduciary duties as directors and
alleged controllers, but that it failed to state claims against the non-Polk-family
directors, Honigman, or the Company’s financial advisor. 42
2. Evidentiary Disputes
The remaining Defendants, as well as former defendants Honigman and the
Company, have withheld documents on the basis of privilege that the Plaintiffs
challenge.43 My Letter Opinion of January 10, 2018 denied the Plaintiffs’ Motion
to Compel to the extent that it sought production of privileged documents and
attorney work product based on the Garner and crime-fraud exceptions. 44 I also
directed the parties to meet and confer as to whether a Special Discovery Master
should be appointed.45
40
Verified Class Action Compl. for Breach of Fiduciary Duties, Dkt. No. 1.
41
See generally Am. Compl.
42
Buttonwood II, 2017 WL 3172722, at *6–11. At oral argument on the Motions to Dismiss, I
also dismissed the Company and two Polk-related entities from this action.
43
See generally, e.g., Pls.’ Mot. to Compel, Dkt. No. 83.
44
Buttonwood III, 2018 WL 346036, at *8 (Del. Ch. Jan. 10, 2018).
45
Id.8
3. The Special Master
My Order of April 9, 2018 appointed Mr. William B. Chandler, III as Special
Discovery Master (the “Special Master”) to address, among other issues in this
action, any discovery disputes “as directed by the Court” or “as the Parties mutually
agree to submit to the Special Master.”46
a. Initial Findings
On December 11, 2018, the Special Master issued two final reports. 47 The
Plaintiffs took exceptions to these reports, which were fully briefed and subsequently
argued before me on August 6, 2019.48 After that argument, I directed the parties to
supplement their exceptions to address, inter alia, the Defendants’ claims of
privilege where Honigman purportedly represented parties with divergent interests
in connection with the transactions at issue in the Amended Complaint. 49
b. Remand
Having reviewed the parties’ supplements, I denied the majority of the
Plaintiffs’ exceptions in my Bench Ruling of December 18, 2019 and in an order
issued on December 27, 2019.50 I also concluded that a document-by-document
review was required to determine whether privilege applied to certain documents
46
Order Appointing Special Discovery Master 2–3, Dkt. No. 208.
47
Corrected Final Report on Pls.’ Mot. to Compel Production of Documents, Dkt. No. 214; Final
Report on Pls.’ Mot. to Compel Discovery, Dkt. No. 215.
48
See generally Tr. of Oral Arg. re Pls.’ Exceptions, Dkt. No. 249.
49
Tr. of Oral Arg. re Pls.’ Exceptions 28, Dkt. No. 249.
50
Order on Pls.’ Exceptions, Dkt. No. 261.
9
prepared by Honigman. Accordingly, I directed the parties to confer on a proposal
for presenting that issue to the Special Master.51
In light of my Bench Ruling, the parties requested that the Special Master
make an in camera review of certain documents from the files of the Defendants,
Honigman, and the Company to determine whether each was properly withheld,
including (1) whether there had been a disclosure such that privilege was waived;52
(2) whether the privilege log entries sufficiently identified counsel and counsel’s
role to justify the privilege claims; and (3) whether draft Board meeting minutes
could be withheld where no final minutes had been produced.53
c. In Camera Review
After conducting the requested in camera review, the Special Master issued a
draft report on August 7, 2020 (the “Draft Report”). 54 The parties briefed their
exceptions to the Draft Report from September 1 through September 18, 2020.55
The Special Master issued his Final Report and Recommendation after In Camera
Review of Certain Documents Withheld on Grounds of Privilege (the “Final
Report”) on November 23, 2020.56
51
Tr. of 12.18.19 Telephonic Rulings of the Court re Pls.’ Exceptions 7:23–9:3, Dkt. No. 262.
52
JA 10, SDM-0223.
53
JA 11, SDM-0241.
54
JA 8.
55
See generally JA 1–7.
56
See generally Final Report.
10
4. Recommendations of the Final Report
Of the 402 documents identified for in camera review, the Final Report
recommends sustaining privilege as to thirty-five and permitting redactions based
on partial privilege to another twenty-four.57
a. Draft Board Minutes and Presentations
With respect to draft board minutes and presentations, the Special Master
concluded that the drafts must be produced where no finalized versions exist or are
feasible to prepare. Accordingly, he recommended that draft minutes and
resolutions are not privileged unless the finalized minutes are produced.58
b. Privilege Log Entries
With respect to privilege log entries, the Special Master recommended that
documents, or markups or comments on documents, are privileged only if the
privilege log identified that they were prepared by an attorney and not circulated
externally (e.g., to Stephen, a financial advisor, or another entity). 59
c. Documents Relating to the Company’s Consideration of a
Stock Repurchase in 2008
The Special Master recommended no privilege for most of the documents
relating to the Company’s consideration of a stock repurchase in 2008. 60 In general,
57
See Pls.’ Opening Br. 2.
58
Final Report 16.
59
Id. 10–15, 17, 32, 34–36, 40.
60
Id.10–15.
11
Stephen’s presence on emails was found to waive privilege as to those
communications. 61 The Special Master concluded that Stephen stood opposite the
Company with respect to the contemplated transaction and, therefore, privilege was
waived by disclosure to him. 62
d. Documents Relating to the Company’s Consideration of a
Short-Form Merger to Convert to a Subchapter S Corporation
in 2010 and Early 2011
Similarly, the Special Master recommended no privilege for most
communications relating to the Company’s exploration of potentially electing
Subchapter S status in 2011.63 Stephen’s presence on emails was again
recommended to waive privilege because “the Polk family and the Company stood
on opposite sides of the contemplated transaction” and, therefore, “did not share a
common interest in considering what a short-form merger transaction would
entail.”64
The Special Master also recommended that disclosure to Morris Nichols
waive privilege once Morris Nichols began acting as counsel for the Special
61
E.g., id. 12.
62
Id. 11–12.
63
Id.15–33.
64
E.g., id. 17–18, 20.
12
Committee because the law firm would have negotiated with Honigman and Holding
Co. in connection with that transaction.65
e. Documents Relating to the 2011 Self-Tender
The Final Report recommended no privilege for most of the documents
relating to the 2011 Self-Tender. 66 However, and relevant here, the Special Master
recommended sustaining privilege as to an email exchange reflecting the advice of
Honigman and in-house counsel with respect to the Company’s disclosure
obligations under its bylaws. 67 Based on the content of the emails, the Special
Master concluded that Stephen and the Company shared a common legal interest in
the legal advice rendered therein. 68
Also relevant here, because the Special Committee was not involved in the
2011 Self-Tender, the Special Master recommended that legal advice from Morris
Nichols with respect to that transaction is privileged.69
65
See id. 27, 29, 30. Prior to Morris Nichols representing the Special Committee, however, the
Special Master did recommend privilege for portions of an email exchange between attorneys at
Honigman and attorneys at Morris Nichols in which Honigman was seeking advice on behalf of
the Company. Id. 24.
66
Id. 33–39.
67
Id. 33.
68
Id. 33–34.
69
Id. 37.
13
f. Documents Relating to the Company’s Sale in 2013
The Final Report recommended that the three documents relating to the 2013
Sale of the Company are not privileged, but with substantive comments on the draft
Stock Purchase Agreement redacted. 70
g. The Plaintiffs’ Exhibit
In their exceptions to the draft report, the Plaintiffs also identified eight
documents not addressed in the Special Master’s Draft Report. The Special Master
determined that most of those documents had already been produced.71 For those
that had not, he recommended no privilege.
5. Procedural History
Both parties took exceptions to the Final Report.72 They briefed those
exceptions (the “Exceptions”) from January 1 to February 22, 2021. 73 The Plaintiffs
also moved to re-allocate the costs of the in camera review to the Defendants (the
“Costs Motion”).74 On April 15, 2021, I heard argument on, and denied, the Costs
70
Id. 40.
71
Id. 40–41.
72
Defs.’ and R.L. Polk Co. Inc.’s Notice of Exceptions, Dkt. No. 264; Pls.’ Notice of Exceptions,
Dkt. No. 265.
73
Pls.’ Opening Br., Dkt. No. 270; Opening Br. in Supp. of Defs.’ Exceptions, Dkt. No. 272
[hereinafter Defs.’ Opening Br.]; Pls.’ Br. in Opp’n to Defs.’ Exceptions, Dkt. No. 273 [hereinafter
Pls.’ Answering Br.]; Defs.’ Answering Br., Dkt. No. 274; Pls.’ Reply Br., Dkt. No. 277; Reply
Br. in Further Supp. of Defs.’ Exceptions, Dkt. No. 278 [hereinafter Defs.’ Reply Br.].
74
Pls.’ Mot. to Allocate Costs, Dkt. No. 271.
14
Motion and deemed both of the parties’ exceptions fully submitted for decision
without further argument as of that date.75
II. LEGAL STANDARDS
A. Standard of Review for Exceptions to a Master’s Report
When exceptions are taken to a Master’s final report, the Court of Chancery
applies a de novo standard of review with respect to issues of both law and fact. 76
B. Attorney-Client Privilege
The attorney-client privilege is codified in Delaware Rule of Evidence 502,
which provides in pertinent part:
A client has a privilege to refuse to disclose and to prevent
any other person from disclosing confidential
communications made for the purpose of facilitating the
rendition of professional legal services to the client (1)
between the client or [its] representative and the client’s
lawyer or [its] representative, (2) between the lawyer and
the lawyer’s representative, (3) by the client or [its]
representative or [its] lawyer to a lawyer or a
representative of the lawyer representing another in a
matter of common interest, (4) between representatives of
the client or between the client and a representative of the
client, or (5) among lawyers and their representatives
representing the same client. 77
75
See Tr. of Oral Arg. and Rulings of the Court on Pls.’ Mot. to Re-Allocate Costs 20, Dkt. No.
280.
76
See Ct. Ch. R. 144(a); DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999).
77
D.R.E. 502(b).
15
C. The Common Interest Doctrine
For the attorney-client privilege to attach, the communications between client
and lawyer must be confidential. 78 Thus, disclosure of otherwise privileged
communications to third parties can render them discoverable. However, there are
circumstances in which parties are deemed to have a “common interest” such that
communications within a group of individuals or entities are privileged. 79 The
classic application of a common legal interest would be to “communications relating
to the defense of a lawsuit among lawyers for codefendants.”80 Common legal
interests can also exist with respect to a business transaction where the parties to a
communication “have interests that are so parallel and non-adverse that, at least with
respect to the transaction involved, they may be regarded as acting as joint
venturers.”81 The common interest must be legal, not commercial. 82 For example
78
Jedwab v. MGM Grand Hotels, Inc., 1986 WL 3426, at *1 (Del. Ch. Mar. 20, 1986) (“[A]n
essential condition for the successful invocation of the privilege is that the matter sought to be
protected be confidential..”).
79
See, e.g., id. at *2 (Del. Ch. Mar. 20, 1986) (“[W]here a client seeks legal advice as to the proper
structuring of a corporate transaction and it is also prudent to seek professional guidance from an
investment banker, it would hardly waive the lawyer-client privilege for a client to disclose facts
at a meeting concerning such transaction at which both his lawyer and his investment banker were
present.”).
80
Id.
81
Id. at *1.
82
In re Quest Software Inc. S’holders Litig., 2013 WL 3356034, at *4 (Del. Ch. July 3, 2013);
Glassman v. Crossfit, Inc., 2012 WL 4859125, at *3 (Del. Ch. Oct. 12, 2012) (“The common-
interest doctrine does not protect communications between parties, or even between their
attorneys, when those communications primarily concern ‘a common commercial objective.’ ”)
(quoting Titan Inv. Fund II, L.P. v. Freedom Mortg. Corp., 2011 WL 532011, at *4 (Del. Super.
Feb. 2, 2011)).
16
“communications about a business deal, even when the parties are seeking to
structure a deal so as to avoid the threat of litigation, will generally not be privileged
under the common interest doctrine.”83
In the corporate context “[t]he attorney-client privilege finds full
application.” 84 In recognition of the reality that a corporation “may only assert the
privilege through its agents, i.e., its officers and directors,” 85 legal advice rendered
to the corporation through one of its officers or directors is typically privileged as
though given to a “joint client.” 86 In other words, the officers and directors of a
corporation share common legal interests with the corporation. This privilege is not
absolute, however, “if the legal advice relates to a matter which becomes the subject
of a suit by a shareholder against the corporation, the invocation of the privilege may
be restricted or denied entirely.”87
III. ANALYSIS
The parties, in their respective Exceptions, dispute the scope of the common
interest doctrine as applied to the documents at issue. The Defendants also take
83
Glassman, 2012 WL 4859125, at *3–4.
84
Zirn v. VLI Corp., 621 A.2d 773, 781 (Del. 1993) (citing UpJohn Co. v. United States, 449 U.S.
383 (1981)).
85
Zirn v. VLI Corp., 621 A.2d at 781.
86
Kirby v. Kirby, 1987 WL 14862, at *7 (Del. Ch. July 29, 1987). Although the Kirby Court
described the directors as a “joint client,” then-Vice Chancellor Jacobs later noted that “a more
accurate description of the relationship is that there was a single “client,” namely, the entire board,
which includes all its members.” Moore Bus. Forms, Inc. v. Cordant Holdings Corp., 1996 WL
307444, at *4 (Del. Ch. June 4, 1996); accord Zirn v. VLI Corp., 621 A.2d at 781.
87
Zirn v. VLI Corp., 621 A.2d at 781.
17
exception to the Special Master’s recommendation that privilege was waived by
deficiencies in the privilege logs. I address each of these issues in turn below. For
the reasons that follow, the Plaintiffs’ Exceptions are denied, and the Defendants’
Exceptions are denied in part and granted in part. 88
A. Common Interest
The Plaintiffs’ sole exception to the Final Report argues that the Special
Master incorrectly recommended sustaining privilege, or partial privilege, for
communications between parties who did not share a common legal interest in the
following transactions: the contemplated stock repurchase in 2008; the contemplated
election of Subchapter S status via short-form merger in 2010; and the completed
2011 Self-Tender. The Defendants’ Exceptions focus on the same transactions,
arguing the opposite. Per the Defendants, privilege was not waived because only
parties with a common legal interest were included in the communications. Both set
of Exceptions, to my mind, raise the same issue: whether the confidentiality, and,
therefore, the attorney-client privilege that would otherwise apply to the withheld
communications, was fatally compromised by the presence of individuals or entities
whose interests were insufficiently “parallel and non-adverse” with respect to the
88
In taking exceptions to the Final Report, the parties have not submitted the documents implicated
by their respective Exceptions for my own in camera review; nor do I consider such review
necessary. I understand my task here to be limited to providing the correct parameters for
application of the privilege. In rendering my decision below, I have considered the Final Report
and the briefing and evidence submitted by the parties, including in their Joint Appendix. See,
e.g., App. to Defs.’ Opening Br., Dkt. No. 272; Ex. to App. to Defs.’ Opening Br., Dkt. No. 272.
18
particular transaction to sustain the common interest doctrine. Accordingly, I
address these Exceptions together. I follow the Special Master and the parties in
organizing the Exceptions by the transaction to which the contested communications
pertain. For each transaction, I consider separately whether the relevant persons or
entities share a common legal interest such that privilege is not waived.
1. Documents Relating to a Possible Self-Tender in 2008
a. Stephen Polk
Regarding a possible self-tender by the Company in 2008, the Final Report
recommends waiving attorney-client privilege where Stephen was included in the
communications. 89 The Special Master concluded that Stephen “stood on both sides
of the contemplated transaction, including opposite the Company.” 90 Therefore, he
did not share a common interest with the Company and privilege was waived as to
those communications as though they were disclosed to a third-party. The
Defendants take exception to this recommendation, contending that, at the pleading
stage, mere allegations of a conflict of interest are insufficient to waive attorney-
client privilege as to the Company’s directors and officers.91
89
Final Report 11–12.
90
Id.91
The Defendants note that the Special Master’s Draft Report recommended privilege as to these
communications and, therefore, they did not previously have the opportunity to take exception to
this recommendation. Defs.’ Opening Br. 2; see also JA 9. Given that the Defendants could not
have taken exception to a recommendation that was not in the Draft Report, I consider this
exception to be properly before me here. Ct. Ch. R. 144(b).
19
I note that, where a fiduciary is alleged to have interests that conflict with
those of the corporation, a stockholder typically attempts to gain access to the
corporation’s attorney-client communications by showing “good cause” under the
standards set forth in Garner v. Wolfinbarger. 92 This exception is not, to my mind,
raised here, however. The parties do not appear to dispute whether there is good
cause to apply an exception to attorney-client privilege, but the more fundamental
question of whether the communications were properly designated as privileged in
the first place.93
“The party attempting to withhold discovery bears the burden of showing that
the communications fall within the scope of the common-interest doctrine.”94 In the
transactional context, the attorney-client privilege will not attach to communications
shared with transactional counterparties unless the parties “have interests that are so
parallel and non-adverse that, at least with respect to the transaction involved, they
may be regarded as acting as joint venturers.”95 Here, Stephen is the Company’s
92
430 F.2d 1093, 1104 (5th Cir. 1970) cert. denied, 401 U.S. 874 (1971). My previous Letter
Opinion denying the Plaintiffs’ Motion to Compel provides a more robust discussion of Garner in
the context of this case. See generally Buttonwood III, 2018 WL 346036 (Del. Ch. Jan. 10, 2018).
93
The Defendants argue that Deutsch v. Cogan, 580 A.2d 100 (Del. Ch. 1990), warrants sustaining
privilege because, in that case, the Court considered whether Garner applied without first
considering whether privilege had been waived by disclosure beyond the circle of confidentiality.
Defs.’ Opening Br. 9. In Deutsch, the parties conceded that the communications were privileged
and it does not appear that the common-interest doctrine was invoked. See, e.g., Deutsch v. Cogan,
580 A.2d at 104. Accordingly, Deutsch does not apply here.
94
In re Quest Software Inc. S’holders Litig., 2013 WL 3356034, at *4 (Del. Ch. July 3, 2013); see
also Moyer v. Moyer, 602 A.2d 68, 72 (Del. 1992); Glassman v. Crossfit, Inc., 2012 WL 4859125,
at *2 (Del. Ch. Oct. 12, 2012).
95
Jedwab v. MGM Grand Hotels, Inc., 1986 WL 3426 at *1 (Del. Ch. Mar. 20, 1986).
20
Chairman, CEO, and President, as well as a stockholder who, per the Defendants,
planned to participate in the stock repurchase. 96 I have also found it reasonably
conceivable that Stephen acted as a controller to use the Company for the Polk
family’s benefit.97 The Defendants contend that the Polk family would not be
negotiating opposite the Company in the context of a self-tender. 98 They concede
that the Company would be on one side as buyer and all shareholders—including,
necessarily the Polk family—“would potentially be on the other side as sellers.”99
They dispute, however, that the Polk family’s interests would diverge from those of
the minority. I make no finding here that Stephen, or the other Defendants, did
control the Company for the benefit of the Polk family, nor is such a finding
necessary. Rather, the reasonable conceivability that they did, without, at this stage,
evidence to the contrary, prevents me from concluding that Stephen’s legal interests
were “so parallel and non-adverse” to those of the Company that “they may be
regarded as acting as joint venturers” with respect to the stock repurchase
contemplated in 2008. 100 This is the Defendants’ burden; it has gone unmet here.
The Defendants argue that this conclusion posits a new general rule, at odds
with our case law, that the attorney-client privilege can be vitiated whenever an
96
See, e.g., Defs.’ Answering Br. 5.
97
See generally Buttonwood II, 2017 WL 3172722 (Del. Ch. July 24, 2017).
98
Defs.’ Answering Br. 8–9.
99
Id. 9 n.19.
100
Jedwab v. MGM Grand Hotels, Inc., 1986 WL 3426 at *1 (Del. Ch. Mar. 20, 1986).
21
executive is “merely” alleged to have control.101 I agree that that fact alone would
be insufficient to prevent privilege from attaching, and I do not hold that there can
never be privilege in the case of an otherwise-privileged document shared with an
alleged controller. The allegations here go beyond control, however. The Plaintiffs
allege facts that indicate that Stephen pursued the transaction for the benefit of the
controlling Polk-family stockholders. The scope of the privilege ordinarily applied
to corporate insiders can be limited where the party objecting to discovery fails to
demonstrate a common legal interest. 102 The Defendants here have failed to
demonstrate a common legal interest between Stephen and the Company with
respect to the stock repurchase contemplated in 2008 for the reasons already stated.
Thus, the Defendants have not met their burden to establish that the relevant
communications are privileged. The Defendants’ Exceptions to this
recommendation of the Final Report are denied.
101
Defs.’ Answering Br. 7–8. They also note that “no case we have found has ever held that (a)
an attorney-client communication that (b) includes both a company and a CEO who is alleged to
be a controlling shareholder about (c) a transaction such as a self-tender is not privileged because
of alleged control, particularly where the only evidence offered is the communication and the
plaintiffs’ allegations.” Id. at 7–8.
102
Cf. Zirn v. VLI Corp., 621 A.2d at 781; In re Teleglobe Communications Corp. v. BCE Inc.,
593 F.3d 345, 373 (3d Cir. 2007) (noting, in the context of a parent spinning off a subsidiary, that
“once the parties’ interests become sufficiently adverse that the parent does not want future
controllers of the subsidiary to be able to invade the parent’s privilege, it should end any joint
representation on the matter of the relevant transaction.”).
22
b. Honigman
The Final Report recommended that portions of communications including
Honigman could be redacted on the basis of attorney-client privilege, because
Honigman advised the Company in connection with the stock repurchase
contemplated in 2008. 103 The Plaintiffs took exception to the recommended
redactions because, per the Plaintiffs, “Honigman simultaneously represented the
Polk family and the Company during communications regarding this conflicted 2008
self-tender.”104 The Defendants deny that Honigman represented anyone other than
the Company in connection with that transaction.
Where one lawyer represents multiple parties to a transaction the common
legal interest must exist among all clients for privilege to attach. 105 I have already
found that Stephen did not share a sufficient common legal interest with the
Company in connection with this transaction to sustain privilege for his
communications with the Company’s counsel. The same conclusion would
necessarily apply to the other members of the alleged control group, the Polk family.
If Honigman advised both the Polk family and the Company in connection with the
103
Final Report 11–13.
104
Pls.’ Opening Br. 14.
105
Cf. In re Lululemon Athletica, Inc. 220 Litig., 2015 WL 1957196 at *9 (Del. Ch. Apr. 30, 2015)
(privilege was proper for founder and chairman’s communications with in-house counsel to
coordinate a company statement about allegedly improper trades).
23
contemplated stock repurchase, privilege would be waived as to communications
with Honigman as though they were disclosed to a third-party.
The Plaintiffs offer nothing to support their assertion that Honigman
represented members of the Polk Family in connection with this transaction,
however. The Defendants, for their part, actively deny it. I cannot, on the basis of
such a sparse record, find that Honigman advised the Polk family such that the Polk
family’s alleged conflict of interest vitiates the otherwise applicable attorney-client
privilege. The Plaintiffs’ Exception to this recommendation is denied.
2. Documents Relating to Taking the Company Private or Converting
to a Subchapter S Corporation
a. Stephen Polk
As with respect to the transaction considered in 2008, the Special Master
recommended that privilege was waived where Stephen was included in
communications about the Company’s potential election of Subchapter S status via
short-form merger because “the Polk family and the Company stood on opposite
sides of the contemplated transaction [and] . . . did not share a common interest in
considering what a short-form merger transaction would entail.”106 The Defendants
argue that this conclusion is flawed because management, including Stephen,
“needed to take certain preliminary steps”; “reasonabl[y] . . . expect[ed] expect that
106
Final Report 17.
24
their communications with the Company’s lawyers were and would remain
privileged and confidential”; and “there was no adversity” between Stephen and the
Company.107
As previously stated, the presence of conflicted corporate insiders may render
communications between the corporation and its counsel discoverable, just as would
disclosure to any third-party lacking a common legal interest. The status of Stephen
and those he communicated with as corporate officers does not change the analysis
at this stage of the inquiry. As a significant stockholder, Stephen had a material
financial interest which would be affected by a merger or a change in the Company’s
tax status. I have also found it reasonably conceivable that Stephen controlled the
Company for the benefit of the Polk family. Thus, the Defendants have not met their
burden to demonstrate that Stephen shared a common legal interest with the
Company or its counsel in connection with the potential Subchapter S election and
communications cannot be withheld on that basis. The Defendants’ Exception to
this recommendation is denied.
b. Honigman
With respect to the same transaction, the Final Report recommended that
certain communications including Honigman could be withheld or redacted on the
basis of attorney-client privilege. The Plaintiffs argue that communications
107
Defs.’ Opening Br. 11–12.
25
including Honigman are not privileged, repeating their allegation that Honigman
simultaneously represented the Polk family and the Company. 108
If counsel simultaneously represents two parties to the same transaction who
do not share a common legal interest, privilege does not attach. For example, in
Jedwab, the Court was unsatisfied with the assertion that “all parties to the merger
have an interest in seeing the transaction effectuated” and found no common interest
for documents prepared by two companies in the course of negotiating a merger
transaction.109 Instead, the Court examined “the functions [the lawyers] were
performing when the documents sought were prepared,” concluding that they
“obviously represented clients with adverse interests.”110 Similarly, in Zirn v. VLI
Corp., the Court held that documents regarding efforts to reinstate a lapsed patent
on whose reinstatement a merger was conditioned “were not privileged as a matter
of ‘common interest’ because the interests of the two companies, were not ‘so
parallel and non-adverse that . . . they may be regarded as acting as joint
venturers.’”111
In their Amended Complaint, the Plaintiffs allege that the “issue of
Subchapter S status was, all along, a ruse to justify a transaction to eliminate
108
Pls.’ Opening Br. 14–17.
109
Jedwab v. MGM Grand Hotels, Inc., 1986 WL 3426, at *1 (Del. Ch. Mar. 20, 1986).
110
Id. at *2.
111
1990 WL at 119685, at *8 (Del. Ch. Aug. 13, 1990) (quoting Jedwab, 1986 WL 3426, at *2).
26
minority shareholders.” 112 In seeking to vitiate the attorney-client privilege, the
Plaintiffs assert that Holding Co. was the Polk family’s “going private acquisition
vehicle.”113 Thus, per the Plaintiffs, any representation of Holding Co. by Honigman
was representation of the Polk family and should waive privilege for the same
reasons joint representation of the Polk family would.
The Defendants, for their part, deny that Honigman represented the Polk
family in connection with this transaction. Although the Defendants appear to
concede that Honigman represented both the Company and Holding Co. “at some
point,” they dispute these entities lacked a common legal interest.114 Per the
Defendants, Holding Co. was only formed as a prefatory step and never engaged in
substantive discussion of deal terms with the Company. 115 In other words, Holding
Co. was essentially a subsidiary of the Company and shared its legal interests.
Additionally, they submit that any dual representation by Honigman ceased before
any adversity of interest could have developed. 116 At that point, Morris Nichols
would have represented the Company and Honigman would have represented only
Holding Co.117
112
Am. Compl. ¶ 55.
113
Pls.’ Opening Br. 8.
114
Defs.’ Answering Br. 11.
115
Defs.’ Opening Br. 6; Defs.’ Answering Br. 6–7.
116
E.g., Defs.’ Opening Br. 6, 11–12.
117
See id.27
It is undisputed that Honigman advised the Company in connection with its
exploration of converting to a Subchapter S corporation, possibly via short-form
merger in 2010. 118 In connection with that same transaction, Honigman also formed
Holding Co.119 The Plaintiffs offer no evidence to support the allegation that
Holding Co. was formed on behalf of the Polk family, rather than the Company.
Honigman’s affidavit implies that Holding Co. was formed as part of Honigman’s
representation of the Company.120 Accordingly, I do not find that privilege is waived
based on Honigman’s alleged dual representation of both the Polk family and the
Company.
If a short-form merger had proceeded, Honigman planned to represent
Holding Co. in negotiations with the Special Committee, which was represented by
Morris Nichols. 121 Honigman most likely represented both the Company and
Holding Co. from November to December 2010. 122 The Defendants and Honigman
submit that Honigman only performed certain preliminary tasks on the Company’s
behalf and that Holding Co. never made any merger proposal. 123 This transaction
itself never occurred.
118
See Pls.’ Opening Br. 9; Defs.’ Answering Br. 6; Kunz Aff. ¶¶ 4–5.
119
Kunz Aff. ¶ 5.
120
Id. ¶¶ 4–5.
121
Final Report 4.
122
See, e.g., Pls.’ Opening Br. 10; Defs.’ Answering Br. 6.
123
Kunz Aff. ¶¶ 6, 11–12.
28
A waiver of privilege occurs when the parties’ interests become adverse. 124 I
do not assume that Holding Co. became adverse to the Company at the moment of
its formation merely because it might at some later point negotiate opposite the
Company in a merger. It does not appear that the parties ever negotiated terms.
Accordingly, I do not find that Honigman represented clients with adverse interests.
The Exceptions to this recommendations are denied.
c. Morris Nichols
The Plaintiffs also take exception to the Final Report’s recommendation that
certain advice of Morris Nichols could be redacted as attorney-client privilege,
because Morris Nichols ultimately represented the Special Committee. Honigman
appears to have consulted with Morris Nichols on matters of Delaware law prior to
Morris Nichols representing the Special Committee. 125 That advice was rendered to
the Company and is therefore properly privileged.126 The Exceptions to this
recommendation are denied.
124
Jedwab v. MGM Grand Hotels, Inc., 1986 WL 3426, at *2 (Del. Ch. Mar. 20, 1986); accord
Cincinnati Bell Cellular Sys. Co. v. Ameritech Mobile Phone Servs. of Cincinnati, Inc., 1995 WL
347799, at *2 (Del. Ch. May 17, 1995) (holding that an employee’s communications with
corporate in-house counsel were not privileged with respect to negotiating the employment
contract because the employee had “moved across the table” and become adversarial).
125
See, e.g., JA 13, SDM-0257.
126
In re Quest Software Inc. S’holders Litig., 2013 WL 3356034, at *4–5 (Del. Ch. July 3, 2013)
(finding that the special committee, the rest of the board, and the company’s financial advisor
shared a common legal interest with respect to the legal risks of a contemplated transaction); cf.
Jedwab, 1986 WL 3426, at *2.
29
3. Documents Relating to the 2011 Self-Tender
a. Stephen Polk
In general, the Final Report again recommended no privilege where legal
advice was shared with Stephen when he “stood on opposite sides of the
transaction.”127 However, privilege was recommended as to several
communications including Stephen that reflected legal advice about the Company’s
disclosure obligations under its bylaws in anticipation of a shareholders meeting.128
The Special Master concluded that Stephen had a common interest with—and was,
therefore, not adverse to—the Company with respect to its disclosure obligations
under the bylaws. 129
The Plaintiffs took exception to this recommendation, arguing that “[t]he
acknowledged adversity of interests and the absence of a binding contract until the
Company accepted the [2011 Self-Tender]” precluded any common legal interest as
to the content of the disclosures or the timing of the issuance of the offer. The
Defendants, for their part, reiterate their general exception that privilege cannot be
waived by disclosure to Stephen based on breaches of fiduciary duty that are only
alleged at this stage.130
127
Final Report 38.
128
Id. 33.
129
Id. 33–34.
130
E.g., id. 8–9.
30
When determining whether parties to a transaction share a common interest
the Court must examine “the functions [the lawyers] were performing when the
documents sought were prepared.”131 The presence or absence of a binding contract
is not dispositive of whether a common interest exists. 132 Two of the documents to
which the Plaintiffs’ exception would apply are identified in the privilege logs as
emails “containing legal advice concerning corporate bylaws of [the Company] and
requirements for notice of shareholder meeting.” 133 The other two are identified as
emails “containing legal advice concerning discussion of a self-tender at an annual
shareholder meeting.” 134 Unlike the documents that I have found are not privileged
due to being shared with Stephen, it does not appear that these documents reflect
legal advice that implicates Stephen’s conflicted position with respect to a self-
tender. They do not appear to contain legal advice about the terms or timing of the
2011 Self-Tender or the content of disclosures related to it. However, as the Special
Master noted, the privilege log description could have better “reflected the nature of
the legal advice being conveyed.” The Defendants should update the privilege log,
131
Jedwab v. MGM Grand Hotels, Inc., 1986 WL 3426, at *2 (Del. Ch. Mar. 20, 1986).
132
Cf. id. The Plaintiffs cite Jedwab in support of their theory that no alignment of interest exists
prior to entering a binding contract. Pls.’ Opening Br. 13; Pls.’ Answering Br. 7. In Jedwab, the
party asserting the privilege argued that parties negotiating a merger had a common legal interest
in seeing the transaction effectuated. Jedwab, 1986 WL 3426, at *2. The Court concluded that
the claim of privilege was ill-founded based on a fact-specific inquiry into the roles the lawyers
were performing, rather than a general rule that the absence of a binding contract precludes a
finding of common interest. Id.133
JA 13, SDM-0278, SDM-0301.
134
JA 13, SDM-0313.
31
but this flaw is not so egregious to warrant waiving privilege as to the entirety of the
communications. The Plaintiffs’ Exceptions to this recommendation are denied.
b. Honigman
With respect to the 2011 Self-Tender, the Plaintiffs reiterate their general
exception that communications including Honigman are not privileged “due to
Honigman’s dual roles.”135 Again they provide no evidence that Honigman
represented anyone other than the Company in connection with this transaction.
Accordingly, and for the same reasons already discussed with respect to the previous
transactions, I cannot conclude that privilege was waived. The Plaintiffs’
Exceptions to this recommendation are denied.
c. Morris Nichols
The Plaintiffs also reiterate their exception that legal advice of Morris Nichols
is not privileged, because Morris Nichols represented the Special Committee, “not
the Company,” in connection with the 2011 Self-Tender. 136 Although Morris
Nichols was retained to negotiate on behalf of the Special Committee in connection
with the Company’s contemplation of a short-form merger in 2010, there is no
evidence to suggest that a special committee was used in connection with the 2011
Self-Tender or that Morris Nichols continued to advise the Special Committee once
135
Pls.’ Opening Br. 18–19.
136
Id. 18.
32
a merger was no longer being considered. Even if the Special Committee was still
constituted and advised by Morris Nichols at this time, the Special Committee, the
Company, and—absent other adversity—the entire Board would share a common
legal interest in advice related to a self-tender. 137 Accordingly, legal advice rendered
by Morris Nichols to the Company is privileged. The Plaintiffs’ Exceptions to this
recommendation are denied.
B. Privilege Log Entries
I agree with the Special Master’s conclusion in the Final Report that the
privilege logs are deficient.138 Additionally, as the Defendants themselves point out,
they did not take exception to that conclusion which was present in the Draft Report,
as well.139 However, the Defendants chose to await my final determination before
turning to the necessary corrections to the logs. The question is whether that languid
approach amounts to a waiver of the privilege. The Special Master recommended
that a waiver is warranted under these circumstances. That is certainly defensible
137
See In re Quest Software Inc. S’holders Litig., 2013 WL 3356034, at *5 (Del. Ch. July 3, 2013)
(finding that the special committee and the rest of the board shared a common legal interest with
respect to the legal risks of a contemplated transaction).
138
See Final Report 10–15, 17, 32, 34–36, 40. Failure to identify in the privilege log that the
document was prepared by an attorney or reflects legal advice of an attorney can result in waiver
of the privilege. See, e.g., Mechel Bluestone, Inc. v. James C. Justice Companies, Inc., 2014 WL
7011195, at *5–6 (Del. Ch. Dec. 12, 2014) (“If a party fails to provide an adequate description for
a document, then the privilege for that document may be deemed waived.”).
139
See Ct. Ch. R. 144(b).
33
given the Defendants’ generally lethargic response to their discovery obligations.140
The withholding of corrections to the log in the context of a proceeding subject to
de novo review does not, to my mind, warrant a waiver of privilege, however, which
would entail an intentional relinquishment of rights. The Defendants should have
acted with alacrity, but I do not find a waiver. The Defendants shall make the
corrections identified in the Final Report within 15 days after entry of an order
implementing the rulings in this Memorandum Opinion, after which the discovery
rulings adopted here from the Final Report shall apply to those documents. To the
extent that my conclusion conflicts with the Final Report, the Defendants’
Exceptions are granted.
IV. CONCLUSION
The Plaintiffs’ Exceptions are denied, and the Defendants’ Exceptions are
denied in part and granted in part. The parties should meet and confer as to a case
schedule and provide an appropriate form of order that includes deadlines by which
the Defendants shall provide corrected privilege logs and produce documents in
accordance with the conclusions of the Final Report and this Memorandum Opinion.
140
Where a party is on notice of obvious deficiencies in their privilege log and does not correct
them after ample opportunity to do so, privilege can be waived. See Mechel Bluestone, 2014 WL
7011195, at *5–6. The Defendants have been on notice of potential deficiencies in their privilege
log entries since at least 2018. See Buttonwood III at 2018 WL 346036, at *1, *8 (Del. Ch. Jan.
10, 2018) (noting the purported deficiencies).
34