Nature of the Case
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Facts
Tekni-Plex, Inc. (Old P), incorporated under the laws of Delaware in 1967, manufactured and packaged products for the pharmaceutical and other industries. In 1986, D became the sole shareholder of Old P. D was also the president, chief executive officer, and sole director of Old P. M&L represented Old P on various legal matters, including environmental compliance. M&L also represented D individually on several personal matters. In March 1994, Old P entered into a Merger with TP Acquisition Company (Acquisition). D sold the company to Acquisition for $43 million. M&L represented both D and Old P. Old P merged into Acquisition, with Acquisition the surviving corporation. The Merger Agreement contained representations and warranties by D concerning environmental matters, including that Old P was in full compliance with all applicable environmental laws and possessed all requisite environmental permits. It further provided for indemnification of Acquisition for any losses incurred by Acquisition as the result of misrepresentation or breach of warranty. Acquisition changed its name to New P. New P commenced an arbitration against D, alleging breach of representations and warranties regarding compliance with environmental laws. New P alleged that D and Old P had taken steps to conceal from Acquisition the emission of VOCs. D retained M&L to represent him, and New P moved to disqualify the law firm. New P moved for an order against M&L (1) enjoining the law firm from representing D in any action against New P, (2) enjoining M&L from disclosing to D any information obtained from Old P, and (3) ordering M&L to return to New P all of the files in the law firm's possession concerning its prior legal representation of Old P. The court held that M&L should be disqualified and approved the injunctions. The Appellate Division affirmed. D and M&L appealed.
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