In the third ruling by the Court of Chancery in the advancement action styled Holley v. Nipro Diagnostics, Inc., C.A. No. 9679-VCP (Del. Ch. Aug. 14, 2015), the court addressed a request that expenses for third-party vendors of nearly $300,000 be allocated between a criminal action in which the former CEO pled guilty, and which was not covered by a former advancement order, and an SEC civil suit for insider trading which was covered by an advancement order. The background of this case, which involved a former CEO who pled guilty to insider trading, included requests for advancement of fees and expert expenses in civil actions that the former CEO claimed were not subsumed by his guilty plea. That prior decision, referred to by the court as Holley I, was highlighted on these pages here.
In sum, this short letter ruling declines to determine that the expenses sought for third-party vendors should be allocated only to the criminal proceeding that was not covered by the advancement order. In essence, the reasoning, not unfamiliar to readers of prior Chancery decisions on this topic, was that allocation of expenses of this nature may be done at the indemnification stage, but is not something the court will inquire into at the advancement stage of a case.