Your Partners' 'Privileged' Planning DocumentsMay Not Be as Protected as They Think.

Somewhere in your majority partner's email, or in a memo from the company's own lawyer, there may be a written record of exactly how the squeeze-out was planned — who suggested it, what alternatives were considered, why a particular number was chosen for your buyout. Your partners almost certainly believe those communications are permanently off-limits. In a business divorce, that belief is often wrong.

Attorney-client privilege is real, and it matters. But it was never designed to let a majority owner use the company's own lawyer to plan wrongdoing against the company's other owners, and then hide the planning behind the same privilege the company is paying for.

why the privilege gets weaker in shareholder disputes

Federal and state courts applying what's known as the Garner doctrine — from the foundational case Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970) — have recognized that when a corporation's own lawyer is consulted about a course of action that will harm minority owners, the usual rationale for attorney-client privilege doesn't fit cleanly. The privilege exists to encourage frank communication between a company and its counsel in service of the company and everyone who owns it, not to protect majority owners from the very people the company's fiduciary duties are supposed to protect.

Courts weigh a number of factors in deciding whether to pierce the privilege in this setting, including the strength of the minority owner's claim, whether the information is available from any other source, and whether the communications concern past conduct or ongoing planning. But the core principle survives across most applications of the doctrine: management is not managing for itself, and its lawyer's advice on how to treat co-owners is not automatically shielded from the co-owners it concerns.

what this looks like in practice

When a squeeze-out is being planned, it rarely happens without professional advice. A majority owner asks the company's lawyer or accountant how to structure a termination, what number to offer for a buyout, or how to characterize a decision that might otherwise look retaliatory. Those communications, and the documents that come out of them, are exactly what minority-owner litigation is designed to reach — and when the possibility of that sinks in, it can change the entire posture of a negotiation.

the accountant-client privilege is often even weaker

Wisconsin, like most states, does not recognize an accountant-client privilege as broad as the attorney-client privilege in the first place. When a majority owner's accountant is involved in structuring a valuation, an appraisal, or a compensation decision that affects a minority owner's buyout, those communications frequently have far less protection than your partners may assume.

why this matters before litigation starts

This isn't just a trial tactic. Knowing that internal planning documents may become discoverable changes the calculus for the side doing the planning, sometimes well before a lawsuit is filed. An attorney evaluating your situation can identify, early, which categories of communication are likely to be reachable and use that as real leverage in resolving the dispute without a prolonged fight over every document.

If you suspect your buyout, your termination, or the valuation you've been handed was engineered with help from professionals who assumed their advice would never see daylight, that assumption is worth testing.