November 7, 2016
M&A Privacy: Transfer of Personal Data & Post-Closing Issues
I recently blogged about Cleary’s thoughts on pre-closing privacy issues. Now, Cleary’s followed up with this blog addressing risks associated with sharing & transferring personal data to a buyer, and the buyer’s post-closing use of that data. Here’s an excerpt discussing the risks of sharing personal data between signing & closing:
M&A lawyers are not always aware of the risks associated with disclosure of personal data between signing and closing. In particular, M&A agreements often contain a clause providing for access to books and records between signing and closing, enabling the purchaser to request certain types of data it reasonably needs, including for purposes of integration planning.
But it is a mistake to assume that because a deal is signed, personal data relating to the target business may be shared freely between the purchaser and the seller. While some M&A agreements state that the seller need not provide access to information prior to closing if providing such access would be in violation of applicable law, such a carve out is not necessarily applied in practice and, in any case, understanding whether a particular disclosure is in violation of privacy laws may be difficult.
– John Jenkins