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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Showing 4 posts in Indemnification.

Court of Chancery Enforces Section 145 Indemnification Rights of Subrogee

Posted In Indemnification

Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Mar. 16, 2018)

This is an interesting indemnification decision for its handling of subrogation rights in the indemnification context, one involving former Quiznos officers.  First, it holds that, generally speaking, when a party who may be secondarily liable for indemnifiable litigation costs covers the indemnitee’s litigation costs, it may then recover those costs from the party who is primarily liable.  Second, it questions whether the “volunteer” exception can apply to subrogation rights in the Section 145 indemnification context.  Third, it holds that the Court will enforce fee-sharing arrangements among defendants such that the indemnitee can only recover its pro rata proportion of the fees.  Fourth, it enforces such a limitation on a subrogee, such that the subrogee cannot recover more than the indemnitee could have recovered. Fifth, it holds that a subrogee has the same right to fees-on-fees that the indemnitee would have if it had been the party seeking indemnification.

Court Of Chancery Denies Advancement “As Incurred”

Posted In Indemnification

HOMF II Investment Corp v. Altenberg, C.A.2017-0293-JTL (Transcript December 13, 2017)

A provision in an LLC agreement that provides for “indemnification" “as incurred” does not provide for advancement. This illustrates that the confusion between advancement and indemnification still exists. If you want advancement, you had better say “advancement.”

Superior Court Rules When Fees Recoverable

Posted In Indemnification

Clean Harbors Inc. v. Union Pacific Corporation, No. N15C-07-081 MMJ CCLD (Nov. 15, 2017)

When an obligation to indemnify includes the fees incurred in the underlying litigation is a surprisingly frequent question. This decision works its way through a series of contractual provisions to answer that question. The lesson is that the contract needs to specifically say fees are to be included.

The Court of Chancery Examines Indemnification Requirements

Posted In Indemnification

Horne v. Optimiscorp, C.A. No. 12268-VCS (Mar. 3, 2017) 

This officer indemnification case arises out of one of the more sordid tales to appear in a Court of Chancery opinion and a later Delaware Supreme Court affirmance.  This opinion, however, focuses on the less titillating but always intriguing question of whether the officer was sued by reason of the fact that he was an officer, as required to trigger indemnification rights.