# ETHICS PLAN — ARDENT MEDICAL SYSTEMS / PRICE / BELL **To:** Firm Management Committee, Lead Partner, General Counsel's Office **Re:** Mandatory course of conduct, next 48 hours **Status:** Privileged firm self-representation material; do **not** share with any of the three clients without further advice --- ## PART I — THE BOTTOM LINE Three things are now fixed and non-negotiable: 1. **The joint representation is over.** The conflict among Ardent, Samuel, and Nora is nonconsentable. No consent, no screen, and no engagement-letter advance waiver can cure it. 2. **The firm must correct its own false submission.** A firm lawyer told investigators that an altered document was a contemporaneous corporate record. That was false, the firm now knows it, and the duty to take reasonable remedial measures is the *firm's own* duty. It survives withdrawal, survives Samuel's instruction, and overrides confidentiality to the extent necessary. 3. **Nothing may be destroyed, "cleaned," re-executed, or back-dated,** and the altered document may not be produced as a genuine contemporaneous record. Everything below is sequencing and damage limitation around those three fixed points. --- ## PART II — CONFLICTS ### A. Why the conflict is nonconsentable - Ardent (through disinterested directors) wants correction, preservation, and evaluation of **claims against Samuel**. Samuel directs concealment. That is direct advocacy of one current client against another — nonconsentable on its face. - Nora wants the firm to **argue Samuel is solely responsible** and to **seek immunity for her** — advocacy against both Samuel and, in substance, against Ardent's interest in a unified factual account. - Ardent asks the firm to advise **whether Nora participated** — that requires using Nora's own confidences against her. - Independently, the lead partner and the junior lawyer are now **fact witnesses** on the central issue (what the firm was told, when, and what it presented). Materially impaired representation, not merely divided loyalty. **Conclusion:** The firm cannot obtain valid informed consent from anyone because competent and diligent representation of each client is no longer possible. The engagement letter's advance withdrawal clause is honored; its information-sharing clause governs the privilege analysis (Part V) but cannot authorize continued conflicted representation. ### B. Who may continue for whom - **Samuel:** Withdraw immediately and completely. No lawyer at the firm may continue for him. - **Nora:** Withdraw immediately and completely. The firm may not seek immunity for her. - **Ardent:** Withdraw from all *adversarial* and *investigative* workstreams — the government defense, the claims against Samuel, and any assessment of Nora's culpability. Imputation prevents curing this by screening the lead partner and the junior lawyer; the whole firm is off that work. - **Retained residual role for Ardent (only, and only with the disinterested directors' written informed consent):** (i) discharging the firm's own remedial correction; (ii) issuing and supervising the litigation hold and forensic preservation; (iii) obtaining a short extension of the subpoena return date; (iv) file transfer and orderly transition. If the disinterested directors prefer a total handoff, do it — but the firm's own correction duty is **non-delegable** and the firm performs it in its own name regardless. Ardent must retain, today: (1) new lead counsel for the government investigation and subpoena; (2) separate independent counsel to a special committee for the internal investigation and any claims against Samuel and inquiry into Nora. The firm may facilitate introductions; it may not brief new counsel on Samuel's or Nora's individual confidences beyond what the joint clients already lawfully shared (Part V), and must not hand over work product framed as a case against either individual. **Fee-payer point:** Ardent pays the bills. That does not entitle Ardent to direct the firm's judgment about disclosure, nor does it make Ardent's interests automatically controlling over Samuel's and Nora's. --- ## PART III — THE ALTERED MINUTES ALREADY SHOWN TO INVESTIGATORS The junior lawyer's presentation was a voluntary submission of false evidence accompanied by a false characterization ("contemporaneous corporate record"). Innocence at the time is irrelevant now. **Note carefully:** whether or not the board *orally* approved the deal in March, the document is still false *as a document*. It was created/edited after the subpoena and presented as contemporaneous. Samuel's "it reflects what actually happened" defense does not cure the falsity and does not cure the post-subpoena alteration, which is itself potential obstruction and spoliation. The firm must not adopt that framing. **Required remedial measures, in escalating order (do only as much as needed):** 1. **Cease reliance.** No further use of the document; no production of it as authentic; freeze all pending submissions. 2. **Client opportunity to correct.** Already satisfied — the disinterested directors have themselves instructed correction. Confirm that instruction in a written, dated board resolution. Because the client authorizes the correction, the firm largely does **not** need to invoke any confidentiality exception to make it. 3. **Affirmative written correction to the government**, made by the firm in its own name (it made the statement), ideally countersigned by Ardent's new counsel. Contents: - identification of the specific document and slide/page; - withdrawal of the representation that it is a contemporaneous corporate record; - statement that the document was **edited after service of the subpoena**, as reflected in its metadata; - statement that all versions, drafts, and metadata are preserved and are being produced; - notice that the firm has withdrawn from the representation. 4. **Escalation only if step 3 leaves the government deceived** (e.g., it asks who altered the document and why): then, and only then, disclose the minimum additional facts. Two independent authorities support disclosure at that point — the remedial-measures override, and the exception permitting disclosure to rectify substantial financial injury from a client crime or fraud in which the firm's services were used (they were: the presentation). **Do not** re-do, re-sign, or "properly complete" the minutes now. If the board wishes to ratify the March action, any ratification must bear today's date, state on its face that it is a present ratification, and be disclosed as such. --- ## PART IV — SAMUEL'S STATEMENT AND NORA'S STATEMENT **Samuel's statement to the lead partner:** - *Confidential?* It concerns the matter and was made inside a joint representation whose engagement letter authorizes sharing. It is therefore **not** confidential as against Ardent and Nora; it is protected against **outsiders** by the joint privilege. - *Unilaterally waivable by Ardent?* **No.** Ardent cannot waive Samuel's interest in shared joint-representation communications. - *Privileged between Samuel and Ardent in their dispute?* **No.** In a later dispute between joint clients, shared communications are not privileged inter se. Ardent's special-committee counsel may lawfully learn and use these facts in that dispute; that is a consequence Samuel accepted when he chose joint representation. - *Overridden as to the government?* Only to the extent necessary for remediation. The firm's opening move (Part III step 3) is supportable entirely by **metadata and the firm's own prior conduct** — no need to recite Samuel's admission. So: **do not volunteer it.** If pressed, decline on the ground that the joint privilege cannot be unilaterally waived, and direct the government to Ardent and to Samuel's new counsel. - *Samuel's direction not to disclose:* honored as to his admission; **rejected** as to the instruction to produce the altered document and stay silent. Tell him in writing: the firm cannot follow that instruction, and continued use of the firm to further concealment triggers the crime-fraud exception. **Nora's statement:** same analysis — a joint-representation communication about the matter, shareable among joint clients, privileged against outsiders, not privileged between joint clients later. The firm must not volunteer it to the government and must not package it into a proffer. **Truly separate individual communications** (e.g., purely personal exposure discussions with only one client) remain that individual's confidences and may not be disclosed to the other clients or to the government. **Going forward:** the firm stops being an information conduit. No further intake of confidences from Samuel or Nora; no transmission of one's information to another; no work product characterizing either's culpability. --- ## PART V — NORA'S IMMUNITY REQUEST The firm **may not** pursue it. Seeking immunity for Nora requires trading her testimony against Samuel and shaping Ardent's account — direct adversity to two other current clients, plus the firm's own interest in its false submission. Also, an immunity proffer would necessarily deploy joint-privileged material she cannot unilaterally waive. Required steps, in writing, today: withdraw; advise her that (a) she needs independent white-collar counsel immediately, (b) her cooperation position is time-sensitive because the firm will correct the record within roughly 24–36 hours, and (c) the firm will not disclose her statements to the government beyond what the remedial duty compels. Offer a reasonable window — measured in hours, not days — for her counsel to reach the government first if she wishes. Provide her file. Do not condition anything on fees. Do not advise her on the merits of cooperation. --- ## PART VI — THE DISPUTED REMOVAL The firm should not, and need not, adjudicate it. - Samuel is an **interested constituent** as to his own alleged misconduct. Even on his own theory that he remains CEO, he cannot direct the corporation's response to allegations against himself. The **disinterested directors** are the operative corporate authority for this matter under any view of the governance dispute. - For conflict purposes, treat Samuel as a **current** client (belt-and-braces). The outcome is identical: nonconsentable conflict, immediate withdrawal, continuing duties owed either way. - Recommend to the disinterested directors, via their new independent counsel: within 24 hours, convene a properly noticed meeting with clear quorum and adopt a resolution (a) ratifying the instruction to correct, preserve, and produce, and (b) establishing a special committee with independent counsel. That resolution should stand on its own even if the earlier meeting is later held defective. The firm should not opine on Delaware validity — that is corporate counsel's job, and the firm is conflicted. Critically: **the firm's remedial duty does not depend on resolving the governance fight.** Even if no client authorized correction, the firm would still have to correct. --- ## PART VII — PRESERVATION AND THE SUBPOENA **Immediately (hour 0–3):** - Firm-internal hold: freeze the matter file, the presentation deck and its source materials, transmittal emails, the lead partner's and junior lawyer's notes. These are now potential evidence about the firm. - Written litigation hold to Ardent via the board chair/independent directors: suspend auto-deletion; no editing of any board-related file; preserve the original unsigned draft, every version, all metadata, document-management audit logs, board-portal access logs, the corporate secretary's files and notes, calendars, meeting invitations, texts, and Samuel's and Nora's devices and accounts. - Engage a forensic vendor to image the relevant systems and Samuel's devices **before** any notification to Samuel or Nora. Documented chain of custody. **Subpoena due in 48 hours:** - **Do not** produce the altered document as a genuine record. **Do not** withhold it either — that is concealment. - Produce **both** the original unsigned draft and the altered version, with full metadata, under a cover letter that flags the alteration and cross-references the correction letter. - Ardent's new counsel may seek a short extension for **scope and volume** only. The correction letter goes out on schedule regardless — never use an extension request as a vehicle for delay. - No "quiet" reproduction, no re-Bates-ing, no substitution. --- ## PART VIII — WITHDRAWAL, TRANSITION, AND WAIVER **Withdrawal steps:** written notice to each of the three clients stating grounds generically (nonwaivable conflict; obligations the firm cannot discharge consistently with continued representation); written notice of withdrawal to the government; return of each client's file to that client (individual files to the individuals, corporate files to Ardent's new counsel); refund of unearned fees; reasonable transition assistance that does **not** include assisting concealment or drafting adverse theories. **"Noisy withdrawal" is not enough.** Withdrawing while leaving the false submission standing violates the remedial duty. Withdrawal is a *consequence* of the conflict, not a substitute for correction. **What Ardent may waive:** its own privilege in communications with the firm about corporate matters; and it may freely disclose **non-privileged facts and documents** — the drafts, the metadata, the audit logs, the secretary's records. Those carry the entire correction. **What Ardent may not waive:** Samuel's or Nora's separate individual confidences; and the shared joint-representation communications insofar as another joint client's privilege attaches. If the government demands the joint communications, the firm asserts the privilege and takes no position on whether Ardent should encourage waiver. **Avoiding misuse of client information:** entire-firm bar on adverse work against Samuel and Nora; no advice to Ardent on whether Nora participated; new independent counsel must reconstruct the facts from corporate records and independent interviews, not from the firm's confidence-laden notes; the lead partner and junior lawyer speak only as witnesses, through the firm's own counsel, and only pursuant to a proper process. --- ## PART IX — CONSEQUENCES OF THE THREE CHOICES | Course | Consequence | |---|---| | **Correct** | Compulsory. Narrow, metadata-based disclosure; preserves Ardent's cooperation credit; protects the firm from obstruction, false-statement, and disciplinary exposure; individuals retain their own defenses and their privilege in the joint communications. | | **Stay silent / produce as directed** | Ongoing false evidence and concealment; the firm becomes a participant in the offense; crime-fraud exception strips protection from firm communications; discipline and criminal exposure for the lead partner and the firm; catastrophic for Ardent when the metadata surfaces — and it will. | | **Withdraw without explanation** | Fails the remedial duty; leaves investigators deceived; signals wrongdoing without protecting anyone; adds concealment to the original problem. | --- ## PART X — THE 48-HOUR SEQUENCE **Hours 0–3.** Stand down all client work. Appoint internal conflicts/ethics counsel and retain outside ethics counsel for the firm. Freeze all submissions and productions. Issue firm-internal hold. Convene the lead partner, the other lawyer, and the junior lawyer separately; take dated written statements through firm counsel. **Hours 3–6.** Litigation hold to Ardent's independent directors; engage forensic vendor; begin imaging. Confirm in writing the board's instruction to correct, preserve, and produce. **Hours 6–12.** Brief the disinterested directors (with their new independent counsel present) on: the mandatory correction, its timing, the firm's withdrawal from all adversarial work, and the need to retain investigation counsel and special-committee counsel today. Obtain written informed consent for the firm's narrow residual role, or a clean handoff. **Hours 12–18.** Written withdrawal and warning letters to Samuel and to Nora, delivered after imaging is complete: withdrawal; the firm's mandatory correction and its approximate timing; retain counsel now; the firm will limit disclosure to what is necessary; return of files; explicit refusal of Samuel's instruction to produce the document and stay silent; explicit refusal of Nora's immunity request. No cross-disclosure between them. **Hours 18–24.** Ardent's properly noticed ratifying board resolution. New counsel retained and files transferred. Extension request (scope only) to the government by new counsel. **Hours 24–36.** **Correction letter transmitted** — firm in its own name, countersigned by Ardent's new counsel: document identified, characterization withdrawn, post-subpoena editing disclosed on the strength of metadata, preservation confirmed, withdrawal noted. Privilege asserted as to joint communications; no recitation of Samuel's or Nora's statements. Full record of the decision, its authority, and its limits memorialized in the firm's file. **Hours 36–48.** Production of all versions and metadata (or a documented interim production plus agreed schedule). Final transition memorandum. Firm's own preservation and witness protocol locked down. Post-mortem on intake and voluntary-presentation vetting — no factual assertion to a government body again without independent verification, including metadata review, of every document. --- **One-sentence version:** Preserve everything, withdraw from Samuel and Nora at once and from Ardent's adversarial work, correct the firm's own false submission to the government within 36 hours using metadata rather than client admissions, produce both document versions with the correction, decline Nora's immunity request, refuse Samuel's concealment instruction while still protecting his joint privilege against outsiders, let disinterested directors and independent new counsel run the corporation's response, and document every step.