CorpCast Episode 2: Advancement 101
Under Delaware law, executives (and former executives) may be entitled to indemnification and advancement from their employer for claims arising in connection with their employment. These rights to indemnification/advancement...more
Situations involving family dynamics, significant wealth, and fiduciary duties can be ripe for conflict. Disputes frequently arise among owners and managers of closely held businesses, family office constituencies, and other...more
When representing a client, it is helpful when law and logic align in an obvious manner. But alignment of law and logic sometimes appears murky at best, and often directly at odds. An example of this is when you need to...more
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
You've likely heard about the latest term to enter the workplace zeitgeist - "quiet quitting" - from any number of sources, including the New York Times and the Wall Street Journal. Advocates of "quiet quitting" are largely...more
The Harmon 1999 Descendants’ Trust v. CGH Investment Management, LLC, C.A. No. 2021-0407-KSJM (Sept. 21, 2021) - Generally, absent unusual circumstances, claims for advancement will not be stayed or dismissed in favor of...more
Perryman v. Stimwave Tech. Inc., C.A. 2020-0079-SG (Del. Ch. Apr. 15, 2021) - Section 145 of DGCL permits corporations to grant advancement rights to persons who may be entitled to indemnification so that they may fund...more
International Rail Partners LLC v. American Rail Partners, LLC, C.A. No. 2020-0177-PAF (Del. Ch. Nov. 24, 2020) - The Delaware Limited Liability Company Act (the “LLC Act”) allows a limited liability company (“LLC”) to...more
Ferrellgas Partners L.P v. Zurich American Insurance Company, C.A. No. N19C-05-275 MMJ CCLD (Del. Super. Aug. 20, 2020) - The Superior Court of Delaware, Complex Commercial Litigation Division recently expanded on its...more
Day v. Diligence, Inc., C.A. No. 2020-0076-SG (Del. Ch. May 7, 2020) - By letter ruling, the Court of Chancery held that plaintiff, a director and former officer of the entity defendant, (“Plaintiff”), was entitled to the...more
A primary purpose of estate planning is to determine what a child will inherit (if anything) upon a parent’s death. But what about a gift given during the parent’s life? Is it an advance on the child’s inheritance, like...more
Carr v. Global Payment Inc., C.A. No. 2018-0565-SG (Del. Ch. Dec. 11, 2019). Under Delaware law, an order requiring a company to advance attorneys’ fees and expenses may be modified if the claims that triggered the...more
Earlier this year, Hertz Corporation filed suit against several former executives, including its former CEO, CFO and general counsel, seeking to recover under its claw-back policies approximately $70 million in incentive...more
The title of this post describes not an army maneuver, but the outcome of a recent lawsuit in Delaware Chancery Court for advancement of litigation expenses in which...more
Under the so-called “American Rule,” litigants usually must pay their own lawyer fees. But in business divorce and other private company disputes between business co-owners, there are a variety of ways for individual...more
In Ephrat v. medCPU, Inc., C.A. No. 2018-0852-MTZ (Del. Ch. June 26, 2019), the Court of Chancery found that conduct occurring after Eyal Ephrat and Sonia Ben-Yehuda (together, “Petitioners”) left their positions warrants...more
Ephrat v. medCPU, Inc., C.A. No. 2018-0852-MTZ (Del. Ch. Jun. 26, 2019). Former directors and officers may be entitled to advancement for post-separation conduct if that conduct is "by reason of the fact" of the directors'...more
In Ephrat et al v medCPU, Inc., the Delaware Court of Chancery considered whether a separation agreement released claims of advancement pursuant to medCPU’s, or the company’s, certificate of incorporation. The plaintiffs,...more
Sider v. Hertz Global Holdings Inc., C.A. No. 2019-0237-KJSM (Del. Ch. Jun 17, 2019). Prior to this ruling, no Delaware opinion had addressed the question of whether decisions granting entitlement to advancement rights are...more
I’ve long been intrigued with the frequency of litigation — especially in Delaware Chancery Court — over advancement of legal fees of a corporate director or officer or LLC manager who’s the target of a lawsuit by the entity...more
On April 30, 2019, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery held that plaintiff Freeman Family LLC (“Freeman”), a member of Park Avenue Landing LLC (the “Company”), is entitled to advancement...more
In a recent opinion issued by the Delaware Court of Chancery, Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019), Vice Chancellor Montgomery-Reeves granted advancement to a member...more
Notwithstanding we’ve had no more than a dusting of snow thus far in my downstate New York neck of the woods, welcome to another edition of Winter Case Notes in which I visit my backlog of recent court decisions of interest...more
Judge Robinson boldly went where no North Carolina Judge writing published Opinions had gone before last month in the case of Wheeler v. Wheeler, 2018NCBC117. The subject was a corporate officer’s right to the advancement of...more