Advancement Claim Survives in Bankruptcy Court
In Re RNI Wind Down Corp., 2007 WL 1970850, 369 B.R. 174 (Bankr. D. Del., July 2007). This blog often discusses Chancery Court and Delaware Supreme Court decisions on the issue of advancement and indemnification. This case involved a claim by a former officer of RNI, a debtor with a Chapter 11 case pending, who filed a proof of claim for advancement and indemnification of legal expenses incurred in connection with the SEC investigation of the RNI and certain officers and directors. The Bankruptcy Court in Delaware found that the advancement and indemnification claims should proceed and were not subject to disallowance under Bankruptcy Code Section 502(e)(1)(B). A more detailed summary of this overlapping of corporate law principles and bankruptcy principles is available at the Delaware Business Bankruptcy Report here.
UPDATE: Thanks to Tom Horan of Morris James for the updated citation to the B.R. above.
