Kwan

Zador Corporation, N.V., appeals after the trial court disqualified Heller, Ehrman, White & McAuliffe (Heller) from serving as Zador’s counsel. For reasons we shall explain, we reverse.

Facts and Procedural Background

In 1983, Zador purchased the “Platt Property.” The Young family owned Zador. C. K. Kwan, acting as agent for the Young family, received the Platt Property on the Youngs’ behalf. It was then transferred to Zador.

A partnership sold the Platt Property. James Claitor and Roy Bolton were principals in the partnership. Pursuant to the sales agreement, Zador was to convey 15 percent of its interest in the Platt Property to Claitor or a business entity as directed by Claitor. This 15 percent interest formed the basis for the underlying litigation.

In 1990, Bolton filed suit against Zador, Kwan, and Claitor. Bolton claimed he was an intended third party beneficiary of the agreement relating to the 15 percent interest. Bolton also alleged that defendants fraudulently transferred the property to a wholly owned Zador subsidiary.

Zador cross-complained against the seller partnership and its partners, including Claitor and Bolton. Zador alleged that the sellers sold…