Corporate finance records, particularly for private, closely-held, corporations, are the type of business records that CEOs do not want to share outside of the circle of directors and/or shareholders who have a direct interest in that information. Corporate financial information is typically viewed as confidential information that could potentially damage a company if it is placed in the public record.
So what can a corporation do if it is involved in litigation where corporate financial information may be disclosed in discovery, or introduced into evidence at trial? If your corporation is a party to litigation one of the first steps your legal counsel should take is to seek a protective order to limit who has access to financial records and other confidential information. A protective order should address not only who has access to confidential information but it should also address how that information is provided and the circumstances for when confidential information can be included as part of the public court record.
When corporate financial documents are produced in discovery a protective order can limit which individuals have access to those records. In cases where the financial records are not known to the public and where the financial records could give a competitor access to inside information, the terms of a protective order can preclude corporate competitors from having access to that information by using a designation such as “for attorney’s eyes only” for those corporate financial records. Such a classification restricts the access only to opposing counsel, and not your corporate competitors.
In addition to utilizing a protective order, you should make sure that your legal counsel is aware of the type of corporate financial documents your business possesses, and the purpose of those various documents. That way your legal counsel can make appropriate objections to the production of corporate financial documents requested in discovery if they are irrelevant to the claims of a particular lawsuit. If your legal counsel is not sufficiently aware of the nuances of your business it is possible that corporate financial records could inadvertently be disclosed.
By working closely with your legal counsel, corporate financial records can be kept confidential and out of the courtroom.
For more information on this article or the other articles in this series, be sure to check the Trial Lawyer on Your Side blog next week or contact the Goosmann Law Firm at [email protected] or (712) 226-4000.