Documents Acquired by Merger Are “Business Records” of Acquirer, Appellate Court Holds

The Georgia Court of Appeals recently held that the “business records” exception to the hearsay rule applies to documents acquired by merger. Specifically, the appellate court held that an acquiring entity (in this case, a bank) can authenticate the business records of the entity it acquired.

In Matthews v. Wells Fargo Bank, NA, Wells Fargo sued a debtor for breach of a promissory note originally executed in favor of Wachovia Bank, the bank with which Wells Fargo famously merged at the height of the financial crisis.  Wells Fargo introduced the note into evidence, over Defendant’s objection, through an employee who never worked for Wachovia.  Defendant argued that because the employee admitted that she was not personally familiar with Wachovia’s record-keeping practices, she could not properly authenticate the note as a “business record.”

The Court of Appeals disagreed, holding that successor entities can authenticate business records acquired via merger, even where the custodian lacks personal knowledge of the record-keeping practices of the acquired company.  Notably, a cornerstone upon which the Court of Appeals based its decision was the “the fastidious nature of record keeping in financial institutions, which is often required by governmental regulations. . . .”  Thus, it remains unclear whether the rule announced in Matthews will be limited to financial institutions or held to apply broadly to all acquired entities.

 

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