Court Opinion

ID: 6338786
Source: CourtListenerOpinion
Date Created: 2022-05-09 14:01:44.611959+00
Date Added: 2024-06-11T15:49:08.655355
License: Public Domain

COURT OF CHANCERY

                                   OF THE

                              STATE OF DELAWARE

|Lori W. Will              |                            |Leonard L. Williams Justice  |
|Vice Chancellor           |                            |Center                       |
|                          |                            |500 N. King Street, Suite    |
|                          |                            |11400                        |
|                          |                            |Wilmington, Delaware         |
|                          |                            |19801-3734                   |

                         Date Submitted: May 3, 2022
                          Date Decided: May 5, 2022

|A. Thompson Bayliss, Esquire        |Raymond J. DiCamillo, Esquire       |
|Michael A. Barlow, Esquire          |Kevin M. Gallagher, Esquire         |
|Eliezer Y. Feinstein, Esquire       |Daniel E. Kaprow, Esquire           |
|Abrams & Bayliss LLP                |Caroline M. McDonough, Esquire      |
|20 Montchanin Road, Suite 200       |Richards, Layton & Finger, P.A.     |
|Wilmington, Delaware 19807          |920 North King Street               |
|                                    |Wilmington, Delaware 19801          |
|Peter J. Walsh, Jr., Esquire        |                                    |
|Matthew F. Davis, Esquire           |                                    |
|Abraham C. Schneider, Esquire       |                                    |
|Patrick A. Lockwood, Esquire        |                                    |
|Potter Anderson & Corroon LLP       |                                    |
|1313 North Market Street, 6th Floor |                                    |
|Wilmington, Delaware 19801          |                                    |
|                                    |                                    |

            RE:  In re Aerojet Rocketdyne Holdings, Inc.
                  C.A. No. 2022-0127-LWW

Dear Counsel:
      This decision resolves plaintiff Warren G.  Lichtenstein’s  motion  to
compel.  He seeks documents withheld by the  defendants  and  their  outside
counsel on the basis of the Aerojet Rocketdyne Holdings,  Inc.’s  (“Aerojet”
or the “Company”) privilege.  Lichtenstein and his three  fellow  plaintiffs
(who join in the motion) comprise half of Aerojet’s board of directors  (the
“Board”) and are director nominees on a slate advanced  by  a  Lichtenstein-
affiliated  entity  in  an  ongoing  proxy  contest.   The  four  defendants
comprise the other half of the Board and are nominees on a competing  slate.

      This court previously entered a temporary restraining order preventing
either Board faction from acting unilaterally on  the  Company’s  behalf  or
using its resources in  connection  with  the  upcoming  director  election.
Lichtenstein’s motion asks that the  neutrality  principles  underlying  the
court’s order be extended to the use of the Company’s privilege.  It  raises
an unusual question: where two halves of a deadlocked  board  are  competing
in a proxy contest, can one half assert the corporation’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  Company’s  privileged   information.    The
defendants have no  greater  claim  to  the  Company’s  privilege  than  the
plaintiffs, who are joint clients of Company counsel.   The  plaintiffs  and
defendants are adverse to one another—at least in the context of  the  proxy
contest.  But it does not follow that one faction of the  Board  is  adverse
to Aerojet because the other is aligned with management.
      The even division of the Board means that  neither  side  can  benefit
from the Company’s resources—including its  privilege—to  the  exclusion  of
the other.  The motion to compel is therefore granted.
   I. BACKGROUND
      Plaintiffs Lichtenstein, James R. Henderson,  Audrey  A.  McNiff,  and
Martin Turchin filed this litigation against  defendants  Eileen  P.  Drake,
Thomas A. Corcoran, Kevin P. Chilton, and  Lance  W.  Lord  on  February  7,
2022.[1]  Lichtenstein is Aerojet’s Executive Chairman and a  major  Aerojet
stockholder  through  Steel  Partners  Holdings  L.P.  (together  with   its
affiliates, “Steel”).[2]  Drake is the  Company’s  Chief  Executive  Officer
and President.[3]
      Tensions between Lichtenstein and Drake purportedly developed in  late
2020 while the Company was negotiating  a  merger  agreement  with  Lockheed
Martin Corporation.  Drake alleged that Lichtenstein—who wanted  Aerojet  to
approach other possible bidders—was “laying the ground work . . . to  remove
[her] as CEO so he  [could]  pursue  his  strategy  and  personally  benefit
financially.”[4]   On  October  13,  2021,  the  Board  formed  a  committee
consisting of the other  six  members  of  the  Board  (the  “Non-Management
Committee”) to investigate Drake’s allegations.[5]
      On January 25, 2022, the Federal Trade Commission sued  to  block  the
Company’s merger with Lockheed.[6]  In the days following, the  Board—facing
the strong  possibility  that  the  merger  would  not  close  and  a  fast-
approaching February 5 advance notice bylaw deadline—was unable to reach  an
agreement on the composition of a slate of director nominees  for  the  2022
annual meeting.[7]
      On  January  28,  2022,  Steel  delivered  a  notice  to  the  Company
nominating  seven  director  candidates  for  election.[8]   Steel’s   slate
included  four  incumbent  members  of  the  Board—the  plaintiffs  in  this
litigation.[9]  The Company’s six independent directors met  to  attempt  to
agree to a compromise slate in  late  January  but  never  reached  a  final
agreement.[10]  Steel amended its  Schedule  13D  on  February  1,  2022  to
disclose the nomination of its slate.[11]
      Later that day and  on  February  2,  2022,  the  defendants,  without
consulting the rest of the Board,  caused  the  Company  to  issue  a  press
release and submit related public filings signed by  the  Company’s  general
counsel.[12]  The press release  disclosed  the  Non-Management  Committee’s
investigation and purported to speak on behalf of  the  Company,  expressing
“disappointment” with  Lichtenstein’s  decision  to  launch  a  “disruptive”
proxy contest.[13]  On February 3,  2022,  the  Company’s  longtime  outside
counsel,  Gibson  Dunn  &  Crutcher  LLP,  writing  in  their  “capacity  as
litigation counsel” for Aerojet, told the plaintiffs that their  actions  in
connection with the proxy contest were “bad  faith”  breaches  of  fiduciary
duty.[14]
      The plaintiffs’ Verified Complaint for Declaratory  Judgment  followed
on February 7, 2022, along with motions to  expedite  and  for  a  temporary
restraining  order.[15]   The  Complaint  seeks  two  declaratory  judgments
intended to maintain the Company’s neutrality  with  respect  to  the  proxy
contest: the first stating that Aerojet officers, directors, and  employees,
among  others,  cannot  act  on   the   Company’s   behalf   without   Board
authorization; and the second stating  that  such  individuals  cannot  take
actions  on  the  Company’s  behalf  supporting  either  slate  of  director
nominees so long as the Board remains split.[16]
      On February 10, 2022, Gibson Dunn sent an  engagement  letter  to  the
defendants informing them that Aerojet had agreed to be jointly  represented
by the firm and to pay Gibson Dunn’s  fees  in  connection  with  the  joint
representation.[17]  The  defendants  signed  the  letter  over  the  coming
days.[18]   On  February   11,   2022,   the   defendants—individually   and
derivatively on behalf of  Aerojet—and  (purportedly)  the  Company  brought
suit against the plaintiffs.  Gibson Dunn served as  litigation  counsel  to
the Aerojet and the defendants.[19]  The  defendants  voluntarily  dismissed
their claims without prejudice on March 7, 2022.[20]
      On February 15, 2022, I granted the plaintiffs’  motions  to  expedite
and for a temporary restraining order.[21]  The temporary restraining  order
required the Company and its advisors to  remain  neutral  regarding  issues
over which the Board was divided.[22]  The order also required  Gibson  Dunn
and Richards, Layton & Finger,  P.A.  to  withdraw  as  Company  counsel  in
connection  with  this  litigation.[23]   After  a  motion  to  enforce  the
temporary restraining order was filed and granted, those firms sought  leave
to withdraw as counsel for Aerojet on March  9,  2022.[24]   The  motion  to
withdraw was granted on April 20, 2022, following considerable delay in  the
retention of neutral counsel for the Company.[25]
      The present motion arises from 46  document  requests  the  plaintiffs
served on the defendants  and  a  subpoena  duces  tecum  served  on  Gibson
Dunn.[26]  After  the  defendants  and  Gibson  Dunn  served  their  written
responses and objections,[27]  Lichtenstein  sought  confirmation  from  the
defendants that they would not seek to invoke the Company’s  attorney-client
privilege  against   him   “other   than   to   protect   (a)   confidential
communications internal to the Non-Management Committee and its counsel;  or
(b) confidential communications regarding  the  substance  of  the  internal
investigation of Mr. Lichtenstein after the formation of the  Non-Management
Committee on October 13, 2021.”[28]  The defendants  rejected  that  request
on April 20.[29]   Gibson  Dunn  also  confirmed  that,  in  its  view,  the
plaintiffs’ subpoena sought documents and communications  protected  by  the
attorney-client privilege, which it could not waive.[30]
      Lichtenstein filed this motion to compel on April  21,  2022.[31]   He
seeks an order requiring that the defendants  and  Gibson  Dunn  to  produce
documents withheld on the basis of Aerojet’s privilege and that the  Company
direct  its  advisors  to  produce  any  information  they   are   currently
withholding  on  the  basis  of  the  Company’s  privilege.[32]   Two  broad
categories of documents  are  in  play:                (1)  documents  dated
before October 13, 2021, when a special committee was formed to  investigate
Mr.  Lichtenstein’s  alleged  misconduct,  and  (2)  documents  dated  after
October 13, 2021.   Henderson,  McNiff,  and  Turchin  filed  a  joinder  to
Lichtenstein’s motion on April 22, 2022.[33]
       Lichtenstein contends that, as a sitting director, his access to  the
Company’s privileged information is on equal footing with the  rest  of  the
Board unless it falls within  the  narrow  confines  of  the  Non-Management
Committee’s investigation.  His position relies  on  his  broad  information
rights as a director and principles of corporate neutrality.
      The defendants argue that the  plaintiffs  are  not  entitled  to  the
Company’s privileged information because they  seek  it  in  furtherance  of
their proxy contest rather than  their  fiduciary  duties.   The  defendants
further aver that the plaintiffs became adverse to the  Company,  such  that
they could no longer expect to be within its privilege,  by  no  later  than
the time that Steel delivered its  nomination  notice.   They  also  contend
that—even  if  the  plaintiffs  were  given  access  to  Company  privileged
information—the court should deny discovery into communications  subject  to
a joint privilege between the Company and defendants.
  II. LEGAL ANALYSIS
      Under Delaware law, a corporation generally cannot assert the attorney-
client privilege “to deny a director access to  legal  advice  furnished  to
the  board  during  the  director’s  tenure.”[34]   A  director’s  right  to
information is “essentially unfettered in nature”[35]  and  includes  “equal
access to board information.”[36]  The right arises from a  director’s  duty
“to protect and serve the corporation.”[37]
      There are three  recognized  limitations  on  a  director’s  right  to
access:
           First, a “director’s right can  be  diminished  by  an  ex  ante
           agreement among the contracting parties.”  Second, the board can
           form  a  special  committee  excluding  a  director,  and   that
           committee “would [be] free to retain separate legal counsel, and
           its  communications  with  that  counsel  would  [be]   properly
           protected.”  Third, privileged information can be withheld  from
           a  director  “once  sufficient  adversity  exists  between   the
           director and the corporation such that  the  director  could  no
           longer have a reasonable expectation that he was a client of the
           board’s counsel.”[38]

      The first limitation is not at  issue  here.   No  ex  ante  agreement
limited the Aerojet directors’ access to information.
      The second limitation is implicated but not in  serious  dispute.   It
allows a board committee formed with the excluded  director’s  knowledge  to
engage in privileged communications with  its  counsel,  “at  least  to  the
extent necessary for the committee’s ongoing  work,  such  as  conducting  a
special   committee   investigation    or    negotiating    an    interested
transaction.”[39]  Lichtenstein acknowledges that  he  is  not  entitled  to
confidential  communications  post-dating  the  Non-Management   Committee’s
formation  on  October  13,  2021  that  concern  the   substance   of   its
investigation.  And the defendants do not meaningfully argue that he is  not
entitled to communications created, sent,  or  received  before  that  date.
There is no indication that Lichtenstein  had  reason  to  believe  that  he
would be the subject of  a  Company  investigation  before  the  Committee’s
formation.[40]  Instead, the defendants’  arguments  concerning  pre-October
13, 2021 documents concern focus—unpersuasively—on relevance.[41]
      The parties’ disagreement centers on whether the adversity  limitation
provides grounds for privileged documents and communications  created  after
October  13,  2021  (excluding  those  revealing  the   substance   of   the
investigation) to be withheld  from  the  plaintiffs.   Application  of  the
adversity limitation “is  assessed  in  view  of  the  reasonableness  of  a
director’s  own  expectations.”[42]   According  to  the   defendants,   the
plaintiffs could not have reasonably  expected  to  remain  clients  of  the
Company’s counsel after Steel delivered  its  January  28,  2022  notice  of
intent to nominate a slate of directors.[43]
      The defendants assert that the plaintiffs are adverse to  the  Company
because of their alignment with Steel,  which  they  paint  as  an  activist
investor engaged in a takeover attempt.  Yet each of  the  competing  slates
includes four incumbent directors.  One  includes  the  Company’s  Executive
Chairman and the other its Chief Executive Officer.  Neither serves  as  the
Company’s slate.  Why one slate should be considered hostile to the  Company
and the other friendly is unclear.
      It is obvious that the plaintiffs and defendants have  developed  some
adversity toward one another.  But that adversity is  not  to  the  Company.
Setting aside the substance of the investigation,  both  sets  of  directors
remained entitled to rely on the Company’s in-house and outside counsel  for
legal advice as joint clients.[44]
      It would also defy the principles animating 8 Del. C. § 141(a) to find
that half of a board faction can rely on its association with management  to
benefit from the protections of the company’s legal advice to the  exclusion
of their fellow directors.  Management  of  a  Delaware  corporation  cannot
unilaterally decide which directors will receive which information.[45]   In
In re WeWork, management decided to withhold privileged information  from  a
special committee.[46]  Chancellor Bouchard explained that  the  application
of the adversity limitation  did  not  apply  because  “the  [corporation’s]
governing  body—the  Board—made  no  decision  to  withhold  the   Company’s
privileged information.”[47]
      It follows that the  defendants’  alignment  with  Aerojet  management
cannot provide them with a greater claim to  the  Company’s  privilege  than
the plaintiffs.  As this court  has  previously  explained,  the  defendants
cannot “co-opt the company’s resources” to further a  campaign  against  the
plaintiffs’ proxy contest.[48] “The privilege exists for the benefit of  the
corporation—not to any  particular  corporate  constituency,”  including  an
individual director.[49]
      The defendants further contend that the plaintiffs are not entitled to
any discovery related to Gibson Dunn’s joint representation of  Aerojet  and
the defendants in connection with this litigation.  That representation  was
allegedly  entered  into  because  “Aerojet  []   agreed   to   such   joint
representation.”[50]
      There are several problems with that argument.  As an initial  matter,
it would only apply after February 11, 2022 (the date  the  first  defendant
signed the agreement)  at  the  earliest—four  days  after  the  plaintiffs’
complaint and TRO motion were  filed  and  four  days  before  the  TRO  was
granted.[51]  More crucially, there is a serious question of who could  have
validly authorized the joint defense agreement  on  Aerojet’s  behalf  given
the context of the representation and the lack of Board approval.[52]
      But providing the  plaintiffs  access  to  advice  delivered  to  both
Aerojet and the defendants would not  constitute  a  waiver  in  any  event.
Again,  the  plaintiffs—as  incumbent  directors—are  within  the  Company’s
privilege and have access to legal advice rendered to the corporation.   The
plaintiffs retained the right to the legal advice Gibson Dunn  delivered  to
the Company at least until the landscape changed  on  March  9,  2022,  when
Gibson Dunn moved for leave to withdraw as Aerojet’s counsel.  The  Delaware
Rules of Evidence provide that  “no  privilege”  exists  for  communications
“relevant to a matter of common interest between or among [two] or more  [of
a lawyer’s] clients if the communication was  made  by  any  of  them  to  a
lawyer retained or consulted in common, when offered in  an  action  between
or among any of the clients.”[53]
                            *     *     *
      For these reasons, the motion to compel is granted.  I  encourage  the
parties to discuss ways to continue to preserve the Company’s  privilege  in
advance  of  trial.   Of  course,  the  parties  are  bound  to  treat   the
information as confidential pursuant to their fiduciary duties  to  Aerojet.
But an additional tier to the  confidentiality  order  in  this  case  or  a
proposed order pursuant to Delaware Rule of  Evidence  Rule  510(f)  may  be
useful.[54]
                                  Sincerely yours,
                                  /s/ Lori W. Will

                                  Lori W. Will
                                  Vice Chancellor

cc: All counsel of record (by File & ServeXpress)
-----------------------
[1] Verified Compl. for Declaratory J. (“Compl.”) ¶¶ 36-39, 41-44 (Dkt. 1).

[2] Id. ¶ 36.  More specifically, Lichtenstein is the Executive Chairman  of
Steel Partners Holdings GP Inc.,  the  general  partner  of  Steel  Partners
Holdings L.P., which held  roughly  5.5%  of  Aerojet’s  outstanding  common
stock through an indirect subsidiary when the Complaint was filed.  Id.

[3] Id. ¶ 41.

[4] Id. ¶¶ 14-15, 18-19.

[5] Id. ¶¶ 18-19; see Pl. Warren G. Lichtenstein’s Mot. 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.

[12] Id. ¶ 74.

[13] Id. ¶ 75.

[14] Id. ¶ 78; Compl. Ex. A.

[15] Dkt. 1.

[16] Compl. ¶¶ 95, 100.

[17] Defs.’ and Non-Party Gibson Dunn & Crutcher LLP’s Opp’n to  Pl.  Warren
G. Lichtenstein’s Mot. to Compel (“Defs.’ Opp’n”) Ex. 1 (Dkt. 160).

[18] Id.

[19] C.A. No. 2022-0146-LWW, Dkt. 1.

[20] Dkt. 55.

[21] Dkt. 38.

[22] Temporary Restraining Order ¶ 2 (Dkt. 41).

[23] Id. ¶ 7.

[24] Dkts. 70, 96.

[25] Dkt. 133.

[26] Dkts. 53, 66; see Mot. to Compel Ex. H.

[27] Dkt. 91; Mot. to Compel Ex. L.

[28] Mot. to Compel Ex. I.

[29] Mot. to Compel Ex. K.

[30] Mot. to Compel Ex. N.

[31] Dkt. 140.

[32] Mot. to Compel ¶ 13.

[33] Dkt. 143.

[34] Moore Bus. Forms, Inc. v. Cordant Hldgs., 1996 WL 307444, at  *4  (Del.
Ch. June 4, 1996).

[35] Schoon v. Troy Corp., 2006 WL 1851481, at *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. Ford Smart Mobility LLC, 2021 WL 5226487, at *3  (Del.  Ch.  Nov.
9, 2021).

[38] Ford Smart Mobility, 2021 WL 5226487, at *2 (quoting Kalisman, 2013  WL
1668205, at *4-5 (Del. Ch. Apr. 17, 2013)).

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

[40] The defendants made a half-hearted argument at  the  motion  to  compel
hearing that adversity  existed  earlier  because  Lichtenstein  received  a
cease-and-desist  letter  from  the  Company’s  non-executive  directors  in
September  2021.   Gibson  Dunn  &  Crutcher’s  Mot.  to  Quash  and  for  a
Protective Order and Pl.’s Mot. to Compel Hr’g Tr. May  3,  2022,  at  38-39
(Dkt. 202); see Defs.’ Opp’n ¶ 6.  The directive  followed  statements  made
by Lichtenstein about a possible merger between  the  Company  and  Lockheed
Martin.  Id. To the extent that letter created any form of  adversity,  that
adversity would only exist regarding the potential merger.  See In  re  CBS,
2018 WL 3414163, at *7 (granting motion to compel “other than [with  respect
to] the matters falling within” the specific subject of adversity).

[41] The defendants’ written responses to the plaintiffs’ document  requests
include numerous relevance objections.  Lichtenstein’s  motion  states  that
it  addresses  only  the  “privilege  objections”  and   that   Lichtenstein
“reserves the right to challenge [defendants’] other meritless  objections.”
 Mot. to Compel n. 2.  The defendants’ opposition, however, argues that  the
irrelevance of documents sought provides grounds to deny  the  motion.   For
example, they argue that, because the proxy contest  arose  in  early  2022,
documents from before October 13, 2021 are irrelevant.  Defs.’ Opp’n  ¶  28.
To the extent that  relevance  is  even  a  question  before  me,  it  bears
emphasizing that the scope of discovery is “broad and  far-reaching.”   Cal.
Pub. Emps. Ret. Sys. Coulter, 2004 WL 1238443,  at  *1  (Del.  Ch.  May  26,
2004) (quoting Pfizer, Inc. v. Warner-Lambert Co., 1999 WL 33236240,  at  *1
(Del. Ch. Dec. 8, 1999)).  Documents from before October 13, 2021 that  bear
on whether Company resources were misused to advance the interests  of  half
of the Board are sufficiently relevant.

[42] In re Howard Midstream Energy P’rs, LLC,  2021  WL  4314111  (Del.  Ch.
Sept. 22, 2021).

[43] See SBC Interactive, Inc. v. Corp. Media P’rs, 1997 WL  770715,  at  *6
(Del. Ch. Dec. 9, 1997) (explaining that a director  is  normally  “entitled
to equal access to legal  advice  furnished  to  the  other  board  members”
unless  her  interests  “come  into  conflict  with  the  interests  of  the
corporation on a given issue” and “appropriate  governance  procedures”  are
employed such that the director no  longer  has  “a  reasonable  expectation
that [s]he was a client of the board’s counsel on a par with  the  remaining
directors”).

[44] See Kirby v. Kirby, 1987 WL 14862, at  *7  (Del.  Ch.  July  29,  1987)
(“The directors are  all  responsible  for  the  proper  management  of  the
corporation, and it seems consistent with their joint obligations that  they
be treated as the ‘joint client’  when  legal  advice  is  rendered  to  the
corporation through of its officers or directors.”); In  re  WeWork  Litig.,
250  A.3d  901,  910  (Del.  Ch.  2020)  (“It  is  because  ‘directors   are
responsible for the proper management of the corporation’ that  they  should
‘be treated as  a  joint  client  when  legal  advice  is  rendered  to  the
corporation through one of its directors or officers.’”  (quoting  Kalisman,
2013 WL 1668205, at *4)); Kalisman, 2013 WL 1668205, at *4 (explaining  that
a  joint  client  “has  a  right  of  equal  access  to  the  materials   he
seeks”—communications with a  common  interest  between  joint  counsel  and
other joint clients—“in light of  his  status  as  a  joint  client  of  the
subpoenaed law firms”).  When former co-clients become adverse and “sue  one
another, the default rule is that all communications made in the  course  of
the joint  representation  are  discoverable.”   In  re  Teleglobe  Commc’ns
Corp., 493 F.3d 345, 366 (3d Cir. 2007) (applying Delaware  law  and  citing
Delaware Rule of Evidence  502(d)(6));  see  also  In  re  Sutton,  1996  WL
659002, at *5 (Del. Super. Aug.  30,  1996)  (describing  Delaware  Rule  of
Evidence 502(b)(5) as “providing that where an attorney  jointly  represents
two clients who later become adversarial parties in  litigation,  one  party
cannot   assert   attorney-client   privilege   to   avoid   disclosure   of
communications  which  were  made  during   the   joint   representation.”);
Restatement (Third) of the Law Governing Lawyers §  75(2)  (Am.  Law.  Inst.
2022) (“Unless the co-clients have agreed otherwise, a  communication  [that
otherwise would be subject to attorney-client privilege] is  not  privileged
as between  the  co-clients  in  a  subsequent  adverse  proceeding  between
them.”).

[45] Hall v. Search Cap. Grp., Inc., 1996 WL 696921, at *2  (Del.  Ch.  Nov.
15,  1996)  (explaining  that  management  “cannot  pick  and  choose  which
directors will receive [which] information”); In re WeWork, 250 A.3d at  909
(same).

[46] 250 A.3d at 909.

[47] Id. (quoting Kalisman,  2013  WL  1668205,  at  *5);  see  id.  at  911
(“[D]irectors of  a  Delaware  corporation  are  presumptively  entitled  to
obtain the corporation’s privileged information as a  joint  client  of  the
corporation  and  any  curtailment  of  that   right   cannot   be   imposed
unilaterally by corporate  management  untethered  from  the  oversight  and
ultimate authority of  the  corporation’s  board  of  directors.”);  Rainbow
Navigation, Inc. v. Yonge, 1988 WL 7389, at *1  (Del.  Ch.  Jan.  29,  1988)
(ordering production of privileged  communications  and  documents  to  both
sides during the pendency of a dispute over who constituted the board).

[48] Dkt. 38 at 81.

[49] Ford Smart Mobility, 2021 WL 5226487, at *3; see Cole v. Wilm.  Mat’ls,
Inc., 1993 WL 257415, at *1 (Del. Ch. July 1, 1993) (“It is elementary  that
when they represent a corporation, lawyers represent the entity and  do  not
thereby represent any single corporate constituency.”); see  generally  Del.
Lawyers’ R. Prof’l. Conduct 1.13.

[50] Defs.’ Opp’n Ex. 1.

[51] Id.

[52] At  oral  argument,  the  defendants  referred  the  court  to  Rainbow
Mountain, Inc. v. Begeman for the proposition  that  management  could  hire
corporate counsel without board approval.  2019 WL 6724420  (Del.  Ch.  Dec.
5, 2019).  The outcome in that case depended on bylaws that explicitly  gave
the corporation’s president that power, however, and no  such  argument  has
been made here.  Id. at *2;  see  also  Del.  Lawyers’  R.  Prof’l.  Conduct
1.13(e) (“A lawyer representing an organization may also  represent  any  of
its  directors,  officers,  employees,  members,   shareholders   or   other
constituents, subject to  the  provisions  of  Rule  1.7  [on  conflicts  of
interest].  If the organization’s consent  to  the  dual  representation  is
required by Rule 1.7, the consent shall be given by an appropriate  official
of the organization other than the individual who is to be  represented,  or
by the shareholders.”).

[53] D.R.E. 502(d)(6).

[54] This decision does not resolve Gibson Dunn’s Motion to Quash and For  a
Protective Order, which will be addressed by  the  court  separately.   Dkt.
161.