PharmAthene, Inc. v. SIGA Techs., Inc., C.A. No. 2627-VCP (Del. Ch. July 10, 2009)

In this letter decision after in camera review of documents listed on defendant SIGA Technologies’ privilege log, the Court held that communications between SIGA and the in-house counsel of a significant, though not controlling, SIGA stockholder, MacAndrews & Forbes Holding, Inc. (“MAF”), qualified as privileged to the extent they were for purposes of legal and not business-only advice. The Court’s ruling relied upon the following factual findings: (a) SIGA is a small company that does not have its own in-house counsel and sometimes relies upon counsel at MAF, the employer of several SIGA board members; (b) MAF’s investment in SIGA includes an agreement for “added services,” such as legal services through counsel employed by MAF; and (c) given MAF’s significant investment in SIGA, the two companies share a “common interest” in SIGA’s success such that MAF attorneys could jointly represent both. The Court thus held that SIGA board members could reasonably infer that MAF attorneys were representing them and could reasonably rely upon the advice of those attorneys. To the extent communications between MAF counsel and SIGA contained “confidential information for the purpose of facilitating the rendition of professional legal services to [SIGA],” the Court held those communications to be protected by the attorney-client privilege.

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