Delaware Business Litigation Report

Chancery Addresses Entitlement to Indemnification

Evans v. Avande, Inc., C.A. No. 2018-0454-LWW (Del. Ch. June 9, 2022)
This decision highlights the need for a nexus between legal expenses and one’s corporate capacity in the context of indemnification, as well as Delaware law’s claim-by-claim approach to indemnification. Here, the Court of Chancery denied indemnification to a former director and officer for tortious interference and defamation claims that he defeated because they concerned conduct occurring post-termination of employment. The Court also denied indemnification relating to a breach of fiduciary duty claim that the fiduciary lost but avoided most of the requested damages, finding partial indemnification would “contravene[] the claim-by-claim approach to indemnification consistently followed by Delaware courts.”

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