Showing 2 posts in Advancement Provision.
Chancery Finds Advancement Decision Not Immediately Appealable When Reasonableness Disputes Remain
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 immediately appealable even though disputes remain as to the reasonableness of the fees. This ruling finds the answer normally should be “no.” More ›Share
Chancery Awards Advancement to LLC Member Applying Corporate Law Precedent
Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019).
Delaware law, under 8 Del. C. § 145, allows for a corporation to agree in corporate documents or contracts to advance legal fees and expenses arising out of one’s service to the company. Aiming to bolster quality leadership, Delaware’s policy is to construe advancement provisions broadly in favor of advancement. Parties also utilize advancement provisions in the LLC context. Different from the corporate context, the foundational principle underlying an LLC relationship is the freedom of contract—the idea that parties are free to arrange their dealings as they choose. Overlaying this important principle is the notion developed under Delaware case law that, while the contract is paramount in the LLC context, structural choices might result in a court importing ideas from an analogous body of law, like corporate law. This recent Court of Chancery opinion recognizes and illustrates that notion when dealing with claimed advancement rights, explaining “parties are free to contract into corporate case law (or not) when they create LLCs, and courts will respect that choice.” More ›Share