Court of Chancery Permits Security For Advancement
Thompson v. The Williams Companies, Inc., C.A. No. 2716-VCS (July 31, 2007).
Companies often find that they are required to provide advancement of attorney fees to former directors or others when the company really does not want to do so because of the conduct involved. Here, in a case involving an employee with an advancement right, the Court held that requiring security for the amounts advanced is appropriate to insure repayment.
Note, however, that this discretion to require security was based on the terms of the provisions providing for advancement. Without that language in a mandatory advancement provision, it is doubtful that a company might require more than the usual and customary undertaking to repay.Share