Ezel / Ethics Opinions / VTBAR

Could former corporate counsel represent an ousted president in efforts to make the corporation sell?

Short answer Opinion 95-22 says the lawyer could not take the adverse shareholder-control work without the former corporate client's consent, given knowledge gained in prior takeover and governance representation.
Bar
VTBAR
Issued
1995
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1995. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.

Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.
View original ethics opinion (PDF)

Plain-English summary

The lawyer had participated in a public company's securities, board, and takeover-defense work at former firms. A former president and significant shareholder then asked the lawyer to help pursue a sale, potentially through shareholder pressure or a new board slate. The lawyer said no particular earlier matter overlapped and that any known information was also known to the proposed client.

The committee applied former DR 4-101's protection of confidences and secrets and Canon 9's appearance concern. It reasoned that knowledge of the company's reactions, board members, and takeover posture could affect the new representation even if the lawyer intended not to use it. It concluded that consent from the former corporate client was required before taking the matter.

Currency note

This opinion was issued in 1995 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history states that the Rules of Professional Conduct applied to lawyer conduct after September 1, 1999. Later amendments or opinions may have changed the analysis. Treat this opinion as historical context and verify current rules before relying on it.

Common questions

Q: Did public availability of some company information resolve the concern?

A: No. The committee said information gained through the prior professional relationship could remain a confidence or secret for the lawyer even if obtainable elsewhere.

Q: Could the lawyer take the shareholder's matter with company consent?

A: The committee said the former corporate client's consent under DR 4-101(C)(1) was needed before the lawyer could undertake the proposed representation.

Background and rules framework

The opinion used former DR 4-101 on client confidences and secrets, Canon 9 on appearance of impropriety, and Canon 7 on zealous representation. It cited Freeman v. Chicago Musical Instrument Co. on sharing of confidences within a firm.

Citations and references

Rules of Professional Conduct:

  • Vermont Code of Professional Responsibility DR 4-101, including DR 4-101(C)(1), Canon 7, and Canon 9

Cases:

  • Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982), firm knowledge of client confidences

See also

Source

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