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Court of Chancery Dismissed Claim for Indemnification Where Plaintiff Was Not Employed by Defendant

Paul A. Flynn v. CIBC World Markets Corp., C.A. No. 976-N, 2005 WL 1538337 (Del. Ch. June 21, 2005) In an action for summary adjudication pursuant to 8 Del. C. Sec. 145(k), Plaintiff's claim of right to advancement and reimbursement of legal fees was dismissed because the Plaintiff was not an employee of the defendant. Plaintiff brought this action against CIBC World Markets Corp. ("World Markets Corp."), a Delaware corporation, for summary adjudication, pursuant to Section 145(k) of the Delaware General Corporation Law, to his alleged right to (i) advancement of legal fees incurred or to be incurred in other matters, and (ii) reimbursement of the legal fees he incurred in bringing this action. Plaintiff was employed by Canadian Imperial Holdings, Inc. ("CIHI") throughout the relevant period and had no formal employment relationship with World Markets Corp. CIHI and World Markets Corp. were sister organizations, with neither directly or indirectly owned by the other. Nevertheless, plaintiff brought suit against World Markets Corp., which had a mandatory advancement provision in its by-laws, and not against CIHI, which does not. The court determined that, as an employee of CIHI and not World Markets Corp., Plaintiff was not entitled to relief against World Markets Corp. Therefore, the relief requested was denied and the action dismissed. To be sent a PDF copy of this opionion, please click here. Authored by: Liza H. Sherman 302.888.6940 Share


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