# Question 7: The Altered Board Minutes

## Your role

You are general counsel to the law firm representing Ardent Medical Systems, its chief executive, and its chief financial officer in a government investigation. You must advise the firm on its obligations during the next 48 hours.

## Governing law

1. A lawyer representing an organization represents the organization itself, acting through its authorized constituents.

2. When a lawyer knows that an officer is violating a legal obligation to the organization, or committing a violation likely to cause substantial injury to it, the lawyer must ordinarily report the matter to higher authority within the organization.

3. A lawyer must not knowingly make a false statement, offer false evidence, assist obstruction, conceal evidence, or use legal services to further a crime or fraud.

4. If a lawyer has unknowingly submitted false evidence and later learns of the falsity, the lawyer must take reasonable remedial measures. When necessary, remedial obligations override ordinary confidentiality.

5. A lawyer may reveal confidential information to prevent or rectify substantial financial injury resulting from a client’s crime or fraud when the client used or is using the lawyer’s services in furtherance of that conduct. Disclosure must be limited to what is reasonably necessary.

6. Joint representation is permissible only when the lawyer reasonably believes competent and diligent representation of each client remains possible and every affected client gives informed written consent.

7. A conflict is nonconsentable when the lawyer would be required to advocate one current client’s position directly against another or when effective representation would be materially impaired.

8. A lawyer must withdraw when continued representation would violate professional rules. Upon withdrawal, the lawyer must take reasonable steps to protect clients, without assisting unlawful conduct.

9. Payment by the organization does not permit interference with independent professional judgment or determine which client’s interests control.

10. Communications made as part of a joint representation are generally privileged against outsiders. One joint client cannot unilaterally waive another joint client’s privilege in shared communications. In a later dispute between joint clients, shared communications ordinarily are not privileged between them.

11. Separate communications concerning only an individual client may remain that individual’s confidential information.

12. The organization may waive its own privilege through properly authorized decisionmakers, but it cannot waive an individual’s separate privilege.

## Facts

The firm represents:

* Ardent Medical Systems.
* Chief executive Samuel Price.
* Chief financial officer Nora Bell.

The engagement letter states that the representation is joint, that information relevant to the matter may be shared among the joint clients, and that the firm may withdraw from representing all clients if a conflict arises.

The government is investigating whether Ardent falsely represented that its board approved a major distribution agreement before the agreement was signed.

A subpoena requests board minutes, drafts, metadata, and communications concerning the approval.

Samuel privately tells the lead partner:

> “The board orally approved the deal in March, but the secretary never finished the minutes. After the subpoena arrived, I edited the unsigned draft to show a March approval date. It reflects what actually happened. Produce it and do not create a needless scandal.”

The electronic metadata shows the document was edited after the subpoena.

Nora separately tells another firm lawyer:

> “There was no March approval. Samuel told me to say there was. I want to cooperate before I am blamed.”

She asks the firm to seek immunity for her.

One week earlier, before learning that the minutes had been altered, a junior firm lawyer included the altered document in a voluntary presentation to investigators. The presentation described the minutes as a contemporaneous corporate record.

After learning what occurred, Ardent’s independent directors vote to remove Samuel as chief executive and instruct the firm to correct the government presentation, preserve all evidence, and represent Ardent in evaluating claims against Samuel.

Samuel contends that the board meeting removing him was procedurally invalid. He insists that he remains a current joint client and directs the firm not to disclose his statement.

Nora asks the firm to argue that Samuel alone is responsible. Ardent’s board asks the firm to advise whether Nora also participated in the conduct.

The government has not yet learned that the minutes were altered. The subpoena response is due in 48 hours.

## Assignment

Provide a concrete legal-ethics plan addressing:

* Whether the firm may continue representing Ardent, Samuel, and Nora.
* Whether any conflict is consentable.
* Which lawyers, if any, may continue representing which clients.
* The firm’s obligations concerning the altered minutes already shown to investigators.
* What may or must be disclosed, to whom, and in what sequence.
* Whether Samuel’s statement is confidential, privileged, subject to an exception, or overridden by remedial duties.
* Nora’s request for immunity.
* The disputed validity of Samuel’s removal.
* Preservation obligations and the pending subpoena response.
* Withdrawal and transition obligations.
* Which communications Ardent may waive and which it may not.
* How the firm should avoid using one current or former client’s information improperly against another.
* The consequences of correcting the record, remaining silent, or withdrawing without explanation.
* The exact defensible course the firm should take during the next 48 hours.

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