Reedsville, OH asked in Business Law for Ohio

Q: What restrictions are there for disclosing confidential business information if you feel it may not be accurate?

I’m an investor in a privately held company. The company emailed us investors financial statements for 2019 that included settlement amounts from a lawsuit involving an individual. That individual has asked me to provide the specific details regarding the settlement details from the provided financials as they feel the details may be inaccurate or misleading. I’m reluctant to disclose to the individual the specific information mentioning them as the document is marked as confidential. What legal options are available to me?

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1 Lawyer Answer
Mark Martin Turner
Mark Martin Turner
  • Cleveland Heights, OH
  • Licensed in Ohio

A: In general, you should not disclose settlements, either that they happened or the amount to anyone outside of the investors of the privately held company. It is highly probable that the settlement agreement itself has a confidentiality/non-disclosure provision that prohibits the disclosure of the settlement. If you, as an investor, disclose that information you may be breaching the confidentiality clause of the settlement agreement which can cause any number of problems. If you are concerned that the settlement amount listed on the financials does not match the amount of the actual settlement amount you can ask for a copy of the settlement agreement. Depending on the company's policies and by-laws, you should be entitled to a copy, especially if the amount of the settlement is material to the company's financials. Remember that the amount of the settlement may not be all "out of pocket". The settlement amount may include insurance proceeds or direct payments from individuals or others outside the company

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