Beware: Not All Communications Between Court-Appointed Bankruptcy Professionals Are Privileged

It is virtually a given in all but the smallest Chapter 11 bankruptcies that financial advisers and/or investment bankers will be retained to assist in the representation of the debtor or any official committee. Bankruptcy attorneys rely on the expertise and assistance of these other professionals in addressing virtually every issue that arises in a case, including debtor-in-possession financing, assumption and rejection of executory contracts and leases, formulation and confirmation of a plan of reorganization or liquidation, and selling some or substantially all of the debtor’s assets under section 363 of the Bankruptcy Code. Indeed, bankruptcy attorneys will provide legal advice to their clients based, at least in part, on the information and opinions obtained from other court-appointed non-attorney professionals. Consequently, a successful Chapter 11 representation requires a close working relationship between the client’s attorneys and non-attorney professionals, and the latter are generally kept fully abreast of the attorney’s strategies on behalf of their common client.