Delaware Business Litigation Report

Court Of Chancery Explains How To Establish "Good Faith" In Indemnification Case

Marc S. Hermelin v. K-V Pharmaceutical Company,  C.A. 6936-VCG (February 7, 2012)

This is the leading decision on how to establish the "good faith" requirement for permissive indemnification after the indemnitee has lost his case.  As the opinion notes, that may require a mini-trial when the good faith of the indemnitee has not been settled in the underlying action.

The opinion is also helpful in setting out what constitutes and how to prove "successful on the merits or otherwise,"  the usual test both under the statute and most bylaws for mandatory indemnification.

Share