News & Analysis as of

Advancement

Court Of Chancery Resolves Allocation Issues In Advancement Case

by Morris James LLP on

Weil v. Vereit Operating Partnership LP, C.A. 2017-0613-JTL (February 13, 2018) - This decision clearly sets out how to allocate fees for claims subject to advancement of attorney fees from those that are not covered by an...more

Cardiac Arrest: A CEO’s Story of Criminal Jeopardy

by Zuckerman Spaeder LLP on

When an executive becomes embroiled in a dispute with an employer, the executive tends to take it personally. And when the executive’s conflict is with the government, the executive’s sense of outrage ratchets up even more....more

Defendants in Stock Purchase Indemnification Action Entitled to Advancement under Bylaws

In Davis et al v. EMSI Holding Co., the Delaware Court of Chancery held that officers and directors of an acquired company were entitled to advancement under the acquired Company’s by-laws for expenses incurred in defending...more

The Perils of Advancement

by Morris James LLP on

There is perhaps one single obligation that most aggravates corporate boards of directors: Paying your opponent's legal fees when you are convinced he has done you wrong. How then is that not just possible, but a regular...more

From New York and Delaware Courts, a Double Blow of Bad News for Sergey Aleynikov

by Zuckerman Spaeder LLP on

Sergey Aleynikov, a former computer programmer at Goldman, Sachs & Co., has been on a legal roller coaster for the past few years. In the span of few days, that roller coaster plummeted steeply—twice. First, on January...more

Delaware Law Updates - 2016 Year in Review

by McCarter & English, LLP on

Our Delaware Corporate and Alternative Entity Law attorneys closely followed the opinions coming from Delaware’s Supreme Court and Court of Chancery. Our 2016 Year in Review is a collection of brief summaries of selected...more

Can an Employer Back out of a Promise to Provide Advancement by Claiming That the Employee Committed Fraud?

by Zuckerman Spaeder LLP on

Numerous decisions from the Delaware courts establish that a company cannot abandon its promise to advance legal fees and expenses when the covered director, officer, or employee properly invokes it....more

A Bitter Pill for Ex-Rite Aid GC: Delaware Court Finds His 2015 Suit for Indemnification Untimely

by Zuckerman Spaeder LLP on

Remember 2002? That year, A Beautiful Mind won best picture, and the University of Maryland won the NCAA basketball tournament. It is also the year that Rite Aid and its former General Counsel, Franklin Brown, began...more

Delaware Law Updates - Delaware law on advancement of fees incurred by former officers and directors

by McCarter & English, LLP on

In a recent Delaware Court of Chancery case - Hyatt v. Al Jazeera America Holdings II, LLC, C.A. No. 11465-VCG - Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery took on a “familiar” issue with a “twist”:...more

Court Of Chancery Explains Advancement Rights Of Seller Representative

by Morris James LLP on

This is an interesting advancement case as it applies the usual test of whether the former directors have been sued “by reason of the fact” they were directors in the context of suit against former owners’ representative for...more

Court Of Chancery Explains Advancement Rights Of Former Director

by Morris James LLP on

As is well known, a former director may be entitled to have his fees advanced in suits against him even after he has resigned from the board. ...more

Court Of Chancery Denies Advancement Until Undertaking Executed

by Morris James LLP on

This decision states what should be obvious — you do not get your expenses advanced until you undertake to repay them if you lose....more

Do Not Pass Go. Do Not Collect $200?: D&O Insurance—Advance Warning on Fee Advancement

by Fenwick & West LLP on

In a recent string of decisions, the Delaware Chancery Court has addressed the scope of the right of Directors and Officers to have their legal expenses paid while governmental investigations or legal proceedings against them...more

Court Of Chancery Declines Stay In LLC Advancement Case

by Morris James LLP on

Tulum Management USA LLC v. Casten, C.A. 11321-VCN (November 9, 2015) - A Delaware court will not stay its hand in favor of litigation elsewhere in an advancement or indemnification case absent “exceptional...more

Court Of Chancery Explains When Director May Bring An Advancement Case

by Morris James LLP on

This is another example of when a director may seek advancement when he is acting affirmatively and not merely as a defendant....more

Update from Wilson Elser’s D&O Insurance Digest

by Wilson Elser on

Litigation Developments and Mega Settlements - Dole Food, Inc. Derivative Action – Delaware Chancery Court Finds D&Os Engaged in Fraud - Dole Food, Inc. shareholders sued Dole Chairman and CEO David Murdock and Dole...more

Delaware Court Leaves Ousted Executive on His Own for Legal Fees

In a September 11, 2015, decision, the Delaware Chancery Court denied a former officer and director advance reimbursement of legal fees in a dispute with his company, despite his insistence that multiple corporate documents...more

Court Of Chancery Explains Advancement Agreement

by Morris James LLP on

This decision explains that an advancement agreement that covers a former director for claims “related to the fact” he was a director has the same meaning as the more typical provision providing for advancement for claim...more

Court Of Chancery Explains “By Reason Of The Fact” Test

by Morris James LLP on

Former directors are entitled to advancement when they are sued “by reason of the fact” that they acted as directors in committing allegedly bad conduct. That test can be hard to apply. However, as this case makes clear, when...more

Court Of Chancery Explains Apportionment In Advancement Case

by Morris James LLP on

Not infrequently, a former director may seek to have his attorney fees advanced in two pending matters, only one of which is covered by a corporation’s advancement obligations. An example would be an SEC action coupled with a...more

Court Of Chancery Determines That Advancement Claim Is A General Creditor Claim

by Morris James LLP on

These two decisions hold that an advancement claim should be treated as a claim of a general creditor by a company in liquidation. Hence, those claims do not get priority in payment along with administrative expenses of the...more

Chancery Court Upholds Indicted Ex-Director's Advancement Rights

by Morris James LLP on

Advancement provides corporate officials with immediate interim relief from the personal out-of-pocket financial burden of paying the significant ongoing expenses inevitably involved with defending investigations and legal...more

Chancery Court Expands on When Legal Fees Can Be Advanced

by Morris James LLP on

Advancement and indemnification rights provide directors and officers of Delaware corporations comfort when accepting positions that often lead to being named in litigation. However, once the interests of the executive and...more

CorpCast Episode 2: Advancement 101

by Morris James LLP on

We’re back with the second episode of CorpCast, Morris James LLP’s podcast discussing Delaware corporate and commercial law and practice. In “Advancement 101,” we discuss the fundamentals of advancement actions in Delaware’s...more

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