CorpCast Episode 2: Advancement 101
Directors, officers and other members of management often have the right under a company’s organizational documents to have defense costs advanced during the pendency of a covered case, investigation or other proceeding. If...more
Serving as a company official—whether an LLC manager or an officer or director of a corporation—can sometimes be a risky prospect. Company officials on occasion find themselves at the center of complex litigation solely...more
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
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
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
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
This decision states what should be obvious — you do not get your expenses advanced until you undertake to repay them if you lose....more
This is another example of when a director may seek advancement when he is acting affirmatively and not merely as a defendant....more
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
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
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
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
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
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