The fundamental distinction between mediation and arbitratio…
Questions
The fundаmentаl distinctiоn between mediаtiоn and arbitratiоn is that:
Attоrney Mоrgаn hаs represented TechNоvа, a small software startup, for approximately four years. TechNova’s founder and CEO, Peter, has become both a close friend and Morgan’s romantic partner. They have been engaged in a consensual sexual relationship for the past eight months, although no one else associated with the company is aware of it. Peter asks Morgan to represent both TechNova and him personally during negotiations with a venture capital firm that intends to invest several million dollars in the company. Morgan agrees without disclosing the potential conflicts of interest with either Peter or TechNova’s board. While preparing documents for the investment, Peter privately tells Morgan that TechNova’s flagship artificial intelligence product does not actually perform as advertised. He explains that the company has intentionally overstated the software’s capabilities to attract investors and insists that the software “will eventually catch up.” Peter tells Morgan that this information must remain confidential because disclosure would destroy the company and ruin him financially. As Morgan continues reviewing company records, Morgan discovers internal emails showing that TechNova’s engineers knowingly copied portions of a competitor’s proprietary source code into TechNova’s software. When Morgan talks to Peter about it, he refuses to stop using the code, stating that removing it would bankrupt the company before the investment closes. Several members of TechNova’s board express concern that Peter has become increasingly willing to take legal risks. They ask Morgan, as the company’s attorney, to keep the board informed of any significant legal problems affecting the company. As the investment closing approaches, Peter instructs Morgan to prepare the closing documents and investor certifications despite knowing they will be used to obtain financing from investors who have not been told the truth about the software’s capabilities. Discuss all ethical violations, if any, Morgan has committed. Apply the ABA Model Rules and the California Rules of Professional Conduct.