COURT OF CHANCERY OF THE STATE OF DELAWARE L ORI W. W ILL V ICE C HANCELLOR L EONARD L. W ILLIAMS J USTICE C ENTER 500 N. K ING S TREET , S UITE 11400 W ILMINGTON , D ELAWARE 19801

- 3734 Date Submitted: May 3, 2022 Date Decided: May 5 , 2022
A

. Thompson Bayliss, Es q uire Michael A. Barlow, Esquire Eliezer Y. Feinstein, E squire Abrams & Bay liss LLP 20 Montchanin Road, Suite 200 Wilmington, Delaware 19807 Peter J. Walsh, Jr. , Esquire Matthew F. Davis , Esquire Abraham C. Schneider , Esquire Patrick A. Lockwood , Esqui r e P otter Anderson & Corroon LLP 1313 North Market Street , 6th Floor Wilmington, D elaware 19801 Raymond J. DiCamillo , Esquire Kevin M. Gallagher, E squire Daniel E. Kaprow, E squire Caroline M. McDonough, Esquire Richards, Lay ton & Finger, P.A. 920 North K i ng Street Wilmington, Delaware 19801

RE: In re Aerojet Rocketdyne Holdings, Inc. C.A. No. 2022

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Dear Counsel:
This decision resolves plaintiff Warren G. Lic htenstein ’ s motion to compel

. He seeks documents withheld by the defendants and their outside couns el on th e
ba sis of the Aerojet Rocketdyne Holdings, Inc

. ’ s ( “ Aerojet ” or the “ Company ” ) privilege

. Lic h tenstein and his three fellow plaintiffs ( w ho join in t he motion) comprise half of Aerojet ’ s board of directors (the “ Bo ard ” ) and are dire ctor
nominees on a slate advanced by a Lich tenstein

- affiliated entity in an ongoingC.A. No. 2022

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May 9, 2022 Pag e 2 of 17 proxy contest . The fou r defendant s comprise the other half of the B oard and are nominees on a compet ing slate

. This court previously entered a temporar y restraining orde r preventing either
B oard faction from acting u nilat erally on the Company ’ s behalf or us ing its
resources in connection with the upcoming director election. Lichtenstein ’ s

m oti o n asks th at the neutrality principles underly ing the court ’ s order be extended to the use of the Company ’ s privilege. It ra ises an unusual question: whe re two
halves of a deadlocked b oard are competing in a proxy contest , can one half assert
the cor porat ion ’ s privilege against the other? I conclude that , in these circumstances, it cannot.
For the reasons explained below, the plaintiffs are entitled to discovery of
certain of the C ompany ’ s privileged informa tion

. The defenda nts have no great e r
claim to the C ompany ’ s p rivilege than the plaintiff s , who are joint clients of
C ompan y co unsel. The plaintiffs and def endants are adverse to one another

— at least in the context of the proxy contes t

. But i t does no t follow that one faction of
the B oard is adv erse to Aero jet because the other is ali g ned with management

. The even d ivision of t he B oard means that neither s ide can benefit from the
C o mpany ’ s resources

— including its privil ege

— to the exclusion of the other. The
motion to compel is therefore g ranted.C.A. No. 2022

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May 9, 2022 Pag e 3 of 17
I. BA CKGROUND
Plaintiffs Lichtenst ein, Ja mes R . Henderson, Audrey A. McNiff, and Marti n
Turchin filed this litigati on against defendants Ei leen P. Drake, Thomas A.
Corcor an, Kevin P. Ch ilton, and Lance W. Lord on February 7, 202 2

. 1

L ichtenstein is A erojet ’s Executive Chairman a nd a major Ae ro jet sto ckholder through Steel Partners Holdings L.P

. ( together with its affil iates, “Steel ” )

. 2 Drake is the Compan y ’s Chief Executive Officer and President

. 3

T ensions between Lic htenstein and Drak e purportedly dev eloped in late
2020 while the Company w as negot iating a merger agreement with Lockheed
M artin C orporation

. Drake al leged that Lichtenstein

— who wanted Aerojet to approach other possible bidders

— w as “laying the ground work

. . . to remove [her]
as CEO so he [could] pursue his strategy and pe rsonally be nefit financially

. ” 4 On October 13, 2021, the Board f ormed a committee consisting of the other six

1 Veri fied Com p l. for Declaratory J. ( “Compl.”) ¶¶ 36

- 39 , 41

- 4 4 (Dkt. 1).
2 Id. ¶ 36

. More specifically, Lichtenstein is the Execu tive Chairman of Steel Partners Holdings GP I nc ., the ge neral partner of Steel Partners Holdings L.P., which held r oughly 5.5% of Aer o

jet ’s outstanding common stock through a n indirect subsidiary when the Complaint was filed. Id.
3 Id. ¶ 41

. 4 Id. ¶¶ 14

- 1 5, 18

- 19.C.A. No. 2022

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May 9, 2022 Pag e 4 of 17
members of the Board ( the “ Non

- Ma nagement Committee ”) to investigate Drake ’s allegations

. 5
On January 2 5 , 2022, t he F ederal Trade Commission sued to block the
Co mpany ’ s merger with L ock h eed

. 6 In the days fol lowing, t he Board

— facing the
strong possibility that the merger would not close and a fast

- approac hing February 5 advance notic e bylaw deadline

— was u na ble to rea ch an agreement on the composition of a slate of director nominees for the 2022 ann ual meeting

. 7 On January 28, 2022, Steel de livered a notice to the Company nomin ating

seven director candi dates for election

. 8 Steel ’ s slat e included four incumbent
members of the Board

— the plaintiffs in this litigation

. 9 The Company ’s six
ind ependent directors met to attempt to agree t o a compro mise slate in late J anua ry
but never reached a final agreement

. 10 Steel amended its Schedule 13D on February 1 , 2022 to disclos e the nomination of its slate. 11

5 Id. ¶ ¶ 18

- 19 ; see Pl . War ren G. Lic htenstein ’s M ot. to Compel ( “ Mot. to Compel ”) Ex. I (Dkt . 140) ; Mot. to Compel ¶ 18

. 6 Compl . ¶ 20.
7 Id. ¶¶ 21

- 24.
8 Id. ¶ 25.
9 Id.
10 Id. ¶¶ 26

- 27.
11 Id. ¶ 28.C.A. No. 2022

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May 9, 2022 Pag e 5 of 17
L ater that day and on February 2, 2022 , the defenda nts , w ithout consulting
the rest of the Board , caused the Company to issue a pre ss re lease and submit

re l a t e d public filings signed by the Compan y ’ s general counsel

. 12 The press
release disclosed the Non

- Management Committee ’ s i nvestigation and purport ed

t o speak on behalf of the Company , expressing “ disappo intment” with
Lichtenstein ’s decision to launch a “disruptive ” pr oxy contest

. 13 On February 3, 2022, the Company ’ s longtime outside counse l , Gibso n Dunn & Crutcher LLP , writing in their “capacity as l iti gation cou nsel ” for Aer ojet , told the plaintiffs that
their actions in connection with the proxy contest were “ bad faith ” brea che s of fiduciary duty. 14 The plaintiffs ’ Verified Complaint for Dec laratory Ju dgment followed on February 7, 2022 , alon g with mo tion s to expedite and for a temporary restraining
order

. 15 T he Complaint seeks two declaratory judgments intend ed to maintain the Company ’ s neut ral ity with respect to the proxy contest : the first stating t hat Aerojet officers, directors, and employees, amo ng othe rs, cannot act on the
C o mpany ’ s behalf without Board authorization ; a nd the se cond stating that such

12 Id. ¶ 74.
13 Id. ¶ 75.
14 Id. ¶ 78; Compl. Ex. A.
15 Dkt. 1

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May 9, 2022 Pag e 6 of 17
individuals cannot ta ke action s o n the Company ’ s behalf supporting either slate of
director nominees so long as the Board remains split

. 16
On Februar y 1 0 , 2022, Gibson Dunn sent a n engagement letter to the defendants informing them that Aerojet ha d agreed to be jointly represented by the
firm and to pay Gibson Dunn ’ s fees in connection with the joint representation

. 17
The de fendants signed the letter o v er the coming days

. 18 On February 11, 2022 , the defend ants

— indi vidually a nd derivatively on beh alf of Aerojet

— and (purportedly) the Company brought suit against the plaintiffs

. Gi bson Dunn served as litigation counsel to the Aerojet and the defendan ts

. 19 The defendant s voluntarily dismissed the ir claims without prejudice on March 7, 2022. 20
On Feb ruary 15, 2022 , I granted the plaintiffs ’ motion s to e xpedite and f or a temporary restraining order. 21 The temporary restraining order requir ed the Company a nd it s advisors to remain neutral regardin g issues o ver which the Board
was divided. 22 The order al so required Gibson Dunn and Richards, Layton &

16 Compl. ¶

¶ 95, 100.
17 De fs. ’ a nd Non

- Party Gibson Dunn & Crutcher LLP ’s Opp ’n to Pl. Warren G. L ichte nstein ’s Mot. t o Co mpel ( “Defs. ’ Opp ’n ”) Ex . 1 (Dkt. 160 ).
18 Id.
19 C.A. No. 2022

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20 Dkt. 55.
21 D kt. 38.
22 Temporary Restra ining Order ¶ 2 ( Dkt. 41 )

.C.A. No. 2022

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May 9, 2022 Pag e 7 of 17 Finger, P .A. to with draw as Company counsel in connection with this litigation

. 23
After a mo tion to enforce th e tem porary restraining order was filed and granted , those firms sought leave to withdraw as counsel for Aerojet on March 9, 20 22. 24
The motion t o withdraw was granted on April 20, 2022 , following considera ble delay in the retention of ne utral counsel for the C ompany
. 25
The pr esent motion arises fr om 46 docu ment requests the plai ntiffs s erved
on the def

endants and a s ubpoena duces tecum served on Gibso n Dunn

. 26 After the
defe ndants and Gibson Dunn served their written responses and objections , 27
Lichtenstein s ou ght confirmation from the defendants that they w ould not seek to
invoke the Co mpany’s attorney

- cli ent privilege against him “other than to protect (a) confidentia l commu nications internal to the Non

- Management Committ ee and its counsel; or (b) confidenti al communications regarding the substance of the
i nternal invest ig ation of Mr. L ichtenstein af ter the for mation of the Non

Management Committee on October 13, 2021.” 28 The defend ants rejected that

23 Id. ¶ 7.
24 Dkt s
. 70, 96.
25 Dkt

. 13 3

. 26 Dkt s . 53, 66 ; see Mot. to Compel Ex. H.
27 Dkt . 91; Mot. to C ompe l Ex. L

. 28 Mot. to Compel Ex. I.C.A. No. 2022

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May 9, 2022 Pag e 8 of 17 request on April 20

. 29 Gibson Du nn also confirmed that , in it s view, the p laintiffs ’

su b poena sought documents and co mmu nications p rotected by the attorney

- client privilege , wh ich it coul d not waive. 30

L ichten stein filed t his motio n to compel on April 21, 2022

. 31 He seeks an
order requiring th at the defendants and Gi bson Dunn to produce docu ments

w ithheld on the basis of Aer oje t ’s privilege and that the Com pany direct its
adv isors to produce any information they ar e currently withhold ing on the basis of
the Co mp any ’s privilege. 32 T wo broad categories of d ocuments are in play : (1) documents dated before O ctober 13, 2021, when a spe cia l committee was
formed to investigate Mr. Li ch tenstein’s alleged misconduct, and (2) documents dated after October 13, 2021. Henderson, McNiff, and Turchin filed a joinder to
Li chtens tein ’ s motion on April 2 2 , 2022

. 33
Lic htenstein co ntends that , as a sit ting dire ctor, his access to the Company ’ s pri vileged information is on equal footing with the r est of the Board unless it falls
within the narrow confines of the Non

- Managemen t Committ ee ’ s investigation

.

29 Mot. to Compel Ex. K.
30 Mot. to Compel Ex. N.
31 Dkt. 140.
32 Mot. to Co m pel ¶ 13.
33 Dkt. 143.C.A. No. 2022

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May 9, 2022 Pag e 9 of 17
H is position re lies on his broad information r ights as a director and principles o f
corporate neutr ality.
The defendants argue t hat the p laintiffs are not entit led to the C ompany ’ s privileged information because they seek it i n furthe rance of t heir proxy contest rather than their fiduciary dutie s. The defendants f urther aver that the plainti ffs
became adver se to the Company, such that they could no longer expect to be
within its pr ivilege , by no later than the time that S t eel delivered its nomi nation
notice

. T hey also contend that

— even if the plain t iffs were given acc ess to Company pri vileged information

— the court should deny discovery into

co mmu nications subje ct to a joint privilege between the Company and defendants

. II. LEGAL A NALYSIS
U nder Delaware law , a corporation generall y canno t assert the atto rne y
client p rivile g e “to deny a director access to legal advice furnished to th e board during th e dir ec tor ’s tenure. ” 34 A director ’ s rig ht to informa tion is “ es sentially

34 Moore Bus. Forms, Inc. v. Cordant H ldgs

. , 1996 WL 307444, at * 4 (Del. Ch. J une 4, 1996)

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unfett e red in nature ” 35 and includes “ e qual a ccess to bo ard infor mation. ” 36 Th e

r ight arises from a direct or ’ s duty “to prot ect and ser ve the co rporation. ” 37
The re are three r ecognized lim itations on a director ’ s right to access : First, a “ director’s r igh t can be dim inished by an ex ante agreement amon g the contracting parties

. ” Seco nd, the bo ard can for m a special committee exclud ing a d irector, and that committee “ would [ be] free to retain separate legal counsel, a nd its communi c ations with that c o uns el would [be] properly protected

. ” Third, priv ile ged i nformation can be wi thheld from a dire ctor “ once sufficient adversity exists between the director and the corporation such that the direct or could no longer have a reasonable exp ectation that he w as a client of the board ’ s counse l

. ” 38
The first limitat ion i s not at issue he re
. N o ex ante agreement limited the Aerojet directors ’ a ccess to information.
The second limi tation is implicated but not in serious dispute

. It allows a
bo ard committee formed with the exc lude d director ’ s knowledge to engage in privi leged communications with its counsel , “ at least to the extent necessary for the

com m ittee ’ s ongo ing work, such a s conducting a special committee investigation

35 Schoo n v. Troy C o rp. , 2006 W L 1 85 14 81, a t *1 n.8 (Del. Ch. June 27, 2006)

. 36 Moore Bus . Forms. , 1996 WL 307444, at * 5

. 37 Henshaw v. Am. Cement Corp. , 252 A.2d 125 , 128 (Del . Ch. 1969) ; see SerVaas v. Fo rd Smart Mobility LLC , 2 02 1 WL 5226487, at *3 (Del. Ch. Nov. 9, 20 21)

. 38 Ford Sm art Mo bil ity , 2021 WL 5226487 , at *2 (q uoting Kalisma n , 2013 WL 1668205, at * 4

- 5 (Del. Ch. Apr. 17, 2013))

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May 9, 2022 Pag e 11 of 17 or negotiat ing an interested transaction. ” 39 Li c hte nst e in ack nowledges th at he is

not en tit led t o confidential commu nications post

- dating t he No n
- Management
C ommittee ’s formation o n October 13, 20 21 that concer n the subs tance of its
i nvestigation. And the defendants do not meaningfully argue that he is not en titled

to communications creat ed , se nt , o r received befo re th at date

. There is no
indication that Lic htenst e in had reason to believe that he w ould be the subject of a Company investigation before the Committee ’ s formation

. 40 Instead, the
def endants ’ argum ents concerning pre
- October 13, 2021 documents concern
focu s

— unp ersuasively

— on relev ance
. 41

39 In re CBS Corp. Litig. , 2018 WL 3414163, at * 4 (Del. Ch. July 13, 2018)

. 40 The defendants made a half

- hearted argum ent at the motion to compel hearing that adversity existe d ea rlier because Lichtenstein received a c ease
- and

- desi st letter fr om the Company ’ s non
- executive direct ors in September 202 1

. Gibson Dunn & Crutcher ’ s Mot. to Quash and for a P rotective Order an d Pl

. ’ s Mot. to Compel H r ’ g Tr. May 3, 202 2 , at 38

- 39 (Dkt. 202 ) ; s ee Defs. ’ Opp ’ n ¶ 6

. The directive followed statements m ade by Lichtenstein about a possible mer g er between the Company and Lockheed Martin. Id. To the exten t that lett er created a ny form of adversity , that adv ersity wo uld only e xist regard ing the potential merger. See In re CBS , 2018 WL 3414163, at * 7 (granti ng motion to compel “ other than [with respect to] t he matters falling wi thin ” the specific subject of adversity).
41 The de fendants ’ writt en responses to the plaintiffs ’ doc ument requests include numerous relevance objections. Lic htenstein ’ s motion states that it addresses only the

“ privilege objections ” and that Lic htenstein “ reserves the right to challenge [defendants ’ ] other meritless objec tions. ” Mot. to Compel n . 2. T he defendants ’ opposition , however, arg ues t hat the irrelevance of documents s ought provides grounds to deny the motion

. For example, they ar gue that , bec ause the proxy contest arose in earl y 2022, documents from before Oct ober 13, 2021 are irrelevant. D efs. ’ O pp ’ n ¶ 28. T o t he extent that relevance is even a question before me, it be ars emphasizing that t he scope of discovery i s “ broad and far

- reaching

. ” Cal. Pub. Emps. Ret. Sys. Coulter , 2004 WL 1238443 , a t *1C.A. No. 2022

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T h e parties ’ disagreement centers on whether the adversity limit ation provides grounds for privilege d do cuments and comm unicat ions created after
Oc tob er 13, 2021 ( ex cluding those revealing the substance of the i nvestigat ion ) t o
b e withheld from th e plaintiffs

. A pplication of the adversity limitation “is assessed
in vi ew of th e reasonablen ess of a director ’s own expectations. ” 42 Accor ding to t he
defend ants , the plaint iffs could no t have reason ably expect ed to remain c lient s of
the Compan y ’ s counsel after Steel delivered it s January 28, 2022 notice of intent to
nominate a sla te of directors

. 43
The defen da nt s assert t hat the plaintif fs are ad vers e to the Company because
of t heir alignment with Steel , which they paint as an activist investor engaged in a takeover attempt

. Yet each of the competing slat es includes f our incumbent
directors

. O ne include s the Company ’ s Executive Chairman and the other its Chief

(Del. Ch. May 26, 2004 ) ( quoting Pfizer, Inc. v. Warner

- Lambert Co. , 19 99 WL 3323 6240, at *1 (Del. Ch. Dec. 8, 1999) )

. D ocu ments from before October 13 , 2021 that bear o n whether Company reso urces were mis used to advance the interests of half of the B oard are sufficiently relevant

. 42 In re How ard Midstream En ergy P ’ rs, LLC , 2021 WL 4314111 (Del. Ch. Sept . 22, 20 2 1)

. 43 See SBC Interactive, Inc . v. Corp. Media P ’ rs , 1997 WL 770715, at * 6 (Del. Ch. Dec. 9, 1997) ( explaining that a d irector is norma lly “ en titled to equ al access to legal advice fur nished t o the other board members ” unles s her interests “ c ome into con fli ct with the interests of the corporation on a given issue ” and “ appropri ate governance procedures ” are employed such that the director no lon ger has “ a re asonable expectation that [ s ] he was a cl ient of the board ’ s counsel on a par with the re ma ining dir ect ors ” ).C.A. No. 2022

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Executive Off

icer. Neither serves as the Company ’ s sl ate. Why one slate should
be considered hostile to the Company and the other friend ly is uncle ar.
It is obvious that t he plaintiffs an d def endants have developed some adversity to ward on e a nother. But th at adver sity is n ot to the C o mpany
. Setting
aside the subs tance of the investi gation, b oth sets of directors remained entitled to rely on the C ompany ’ s in

- house and outside counsel for legal advice as joint
clients

. 44

44 See Kirby v. Kirby , 1987 WL 14862, at *7 (Del. Ch. July 29, 19 87) ( “The directors are all res ponsible for th e prope r manage ment of the corpo rati on, and it seems consistent
w ith their j oint oblig ations that they be treated as t h e ‘ join t client ’ wh en legal ad vice is rendered to the corporation throug h of its officers o r directors

. ”); In re WeWork Litig. , 250 A. 3d 901, 910 (D el. Ch. 20 20 ) ( “It is bec ause ‘d irectors are responsib le for the proper management of the corpo ration’ that the y should ‘be tre ated as a joint client when legal advice is rendered to the corporation through one of its directors or officers.’” (quoting Kal isman , 2013 W L 1668205 , at *4 ) ) ; Kalisman , 2013 WL 1668 205, a t *4 ( explaining that a joint client “has a right of equal access t o the materials he seeks ”

— communications with a common interest between joint counsel and other joint clients

— “ in light of his status as a jo int clien t of the subpoenaed law firms”)

. W hen former co

clients become adverse an d “ sue one anothe r, th e default rule is that all communications made in the course of the joint representation are discoverable .” In re Te leglobe Commc ’ ns Corp ., 493 F.3d 345, 366 ( 3d C ir. 2007) ( apply ing Delaware law and citing D elaw are Rule of Evidence 502(d)(6) ) ; see also In re Sutton , 1996 WL 659002, at *5 (De l. S uper. Aug. 30, 1996) ( describing Del aware Rule of E vidence 502(b)(5) a s
“ providing that w here an attorney jointly repr esen ts two clients who later beco me adversarial parties in litigation, one party cannot assert attorney

- client privilege to avoid disclosure of communications which were made during the joi nt repre sent ati on.”) ; Restatement (Third) of the Law Governing Lawy ers § 75(2) ( Am. Law. Ins t. 2022) (“Unless the co

- cli ents have agreed otherwise, a communication [that otherwise would be subject to attorney

- client privilege] is not privileged as between the co

- clients in a su bsequent advers e procee ding between them.”)

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It would also defy the principle s ani m ating 8 Del. C. § 141(a) to find that
half of a board fa ction can rely on its association with management to benefit from the protections o f the company ’ s legal advi ce to the exclusion of their fellow
directors

. M anagement of a Delaware corporation cannot uni lat erally decide
which di rectors will receive which informa tion. 45 In In re We Work , management
decided to withhold privil e ged information from a special committee. 46 Chancellor Bouchard explained th at the application of the ad versity limitation did not apply
bec ause “ the [corporation ’ s] governing body

— the Board

—

made no d ecision to
withhold the Company ’ s privileged info rmation

. ” 47
It follows that t he defendants ’ ali gnment with A erojet management cannot provi de them with a greater cla im to the Company ’ s priv ilege than the plaintiffs.
A s this court has previously explained, the defendants canno t “c o
- opt the

45 Ha ll v. Search Cap. Gr p., Inc., 1996 WL 696921, at *2 (Del. Ch. Nov. 15, 1996) (explaining tha t manageme nt “ cannot pick and choose w hich directors will receive [which] information ” ) ; In re WeWork , 250 A.3d at 909 ( same).

46 2 50 A.3d at 909

. 47 Id. (quoting Kalism an , 2013 WL 1668205, at *5 ) ; see id

. at 911 ( “ [D] irectors of a Delaware corporation are presumpt ively entitled to obt ain the corporation’s privileged information as a joint client of the corporation and any curt ailment of that right cannot be imposed unila tera lly by corporate manag ement untethered from the oversight and ultimate authority of the corp oration’s board of di rectors

. ” ) ; Rainbow Navigation, Inc. v. Yonge , 1988 WL 7389, at *1 (Del. Ch. Jan

. 2 9, 1988) (or dering producti on of pr ivileged communication s and documents to both s ides during the pend ency of a dispu te ove r who consti tuted the board )

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company ’s resources ” to further a camp aign a gainst the plain tiffs ’ proxy contest. 48

“ The p rivilege exi sts for the benefit of th e corp orat ion

— not to an y par ticular

co r porate constitu ency , ” including an individual director. 49
The defendants further contend that the pl aintiffs are not entitled to any
d iscovery related to Gi bson Dunn ’s joint representati on of Aerojet and th e
defendants in c onnection with this l itigation

. That represent ation was allegedly
entered into because “Aeroje t [ ] agreed to such joint representation. ” 50
The re are several problems with that argument. As an initial matter, it
would o nly app ly after February 11, 2022 ( the date the first de fendant signed the
agreement ) at the earliest

— four days after the plaintif fs ’ comp laint and TRO
motion were filed and four days befor e the TRO was granted

. 51 More crucially,

t here is a serious ques tion of wh o could have validly authorized the joint defense

48 D kt. 38 at 81.
49 Ford Smart Mobility , 2021 WL 52 26487 , at *3 ; s ee Cole v. Wilm

. Mat ’ ls , Inc. , 199 3 WL 2 57415, at *1 (Del. Ch. July 1, 1993) ( “ It is elementary that when they repre sent a corp oration, lawyers represent the entity a nd do n ot ther eby represen t an y single corporate constituency.” ) ; see generally Del. Lawyers ’ R. Prof ’ l . Conduct 1.13

. 50 De fs. ’ Opp ’ n Ex. 1.
51 Id.C.A. No. 2022

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May 9, 2022 Pag e 16 of 17 agreement on Aerojet ’ s behalf given the context of the representation and the lack of Board approval

. 52 But providing t he plaintiffs ac cess to advi ce delivered to both Aerojet and
th e defendants would not constitute a waiver in any event. Again, the pl ain tif fs

—

as incumbent directors

— are wi thin t he Company ’ s privil ege and have access to legal advice rendered to the co r pora tion

. T he plaintiffs retained the right to the
le gal advice Gibson Dunn delivered to the Company at least unt il th e land scape
ch anged on March 9, 2022 , when Gibson Dunn moved for leave to withdraw as Aerojet ’ s counsel

. The Delaware Ru les of Evidence pr ovi de that “ no p rivilege ”
exists for communications “relevant t o a matter o f c ommon interest between or

among [tw o ] or more [of a la wyer ’ s] cli ents if the communicati on was made by any of them to a lawyer r etained or consulted in commo n, when offered in an

act i on between or a mong any of the clients. ” 53

52 At oral argument, t he defendants r eferred the court to R ain bow Mount ain, Inc. v. Be gem an for the p roposition that management could hire corporate counsel without board approv al. 2019 W L 6724420 (Del. Ch. De c. 5, 2019 )

. The out come in that case depend ed on by laws that explicitly gave the corporation ’ s pres id ent t hat powe r, however , and no such argument has bee n made here

. I d. at * 2 ; see also Del. Lawyers ’ R. Prof ’ l

. Conduct 1.13 (e) ( “ A lawyer representing an organization ma y al so represent any of its directors, officers, employees, members, shareholders or o ther constituents, subject to th e provisions of Rule 1.7 [on conflicts of interest ]

. If the organization’s consent to th e dual re presentation is required by Rule 1.7, the con sent shall be given by an appropriate official of the organization other than the indiv idual who is to be represen ted, or by the shareholders. ” ).
53 D.R.E. 502(d)(6 )

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* * * For these reasons, the motion to compel is granted

. I encourage the parties
to di s cuss ways to continue to pr eserve the C o mpany ’ s privilege in advance of
trial . Of course, the par ties are bound to trea t the information as confidential
pursuant to their fiduciary duties to Aer oje t. But an additional tier to the

con fidentiality order i n this case or a proposed order pursuant to Delaware Rule of Evidence Rule 510(f) may be useful

. 54
Sincer el y yo urs , /s/ Lori W. Will Lori W. Wil l Vice Chancellor

cc: All counsel of record (by File & ServeXp ress )

54 This decision does not reso lve Gibson D unn ’ s Motion to Quash and For a Protective Or der , which will be addressed by the court separately. Dkt. 161.