In the corporate context, Delaware has long recognized a public policy in favor of both indemnification and advancement. “Indemnification encourages corporate service by capable individuals by protecting their personal financial resources from depletion by the expenses they incur during an investigation or litigation that results by reason of that service.” Homestore, Inc. v. Tafeen, 888 A.2d 204, 211 (Del. 2005). Similarly, in an effort to induce able corporate managers to serve in Delaware corporations, “[a]dvancement provides corporate officials with immediate interim relief from the personal out-of-pocket financial burden of paying the significant on-going expenses inevitably involved with investigations and legal proceedings.”

Originally published in Business Law Today, February 2017.