Tag Archives: Indemnification

Chancery Issues Additional Advancement and Indemnification Rulings in Quiznos Restructuring

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. The Court of Chancery issued two opinions relating to a web of advancement and indemnification claims brought on behalf of multiple, separate plaintiffs: (1) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Jan. 9, 2017); and (2) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL … Continue Reading

Chancery Grants Stay and Refers Indemnification Claims to Arbitrator to Determine Arbitrator’s Jurisdiction

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. In Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Dec. 2, 2016), the Chancery Court stayed indemnification claims to determine whether they were arbitrable. Background: This matter involves the perenial issue of arbitrability.  Plaintiffs sued three Quiznos sandwich shop entities for indemnification and advancement pursuant to … Continue Reading

Indemnification Rights Not Stymied by Amendment to Operating Agreement

The case of Branin v. Stein Roe Investment Counsel, LLC, 2014 WL 2961084 (Del. Ch. June 30, 2014) raised the interesting question of whether the operating agreement in effect at the time the suit was filed or the operating agreement in effect at the time the indemnification claim was made will control the right to indemnification.  … Continue Reading

Chancery Denies Claim For Advancement and Indemnification From Successor Entity

Grace v. Ashbridge LLC, C.A. No. 8348-VCN (Del. Ch. Dec. 31, 2013). Issue Addressed:  Whether a successor entity was liable for advancement and indemnification claims based on the operating agreement of a successor entity LLC even though the sole allegations involve a predecessor entity and a related entity. Short Answer:  No. Brief Overview:  An understanding … Continue Reading

Chancery Clarifies Requirement for Statutory Indemnification

Costantini v. Swiss Farm Stores Acquisition LLC, C.A. No. 8613-VCG (Del. Ch. Dec. 5, 2013). Issue Addressed Whether the agency relationship between the company and a person seeking indemnification rights was sufficient for purposes of the standard applicable for statutory indemnification. Short Answer:  At the preliminary stage of a motion for judgment on the pleadings, … Continue Reading

Supreme Court Rejects Contractual Indemnification Claim

Winshall v. Viacom International, Inc., Del. Supr., No. 39, 2013 (Oct. 8, 2013).  Issue Addressed: The Supreme Court affirmed a Chancery ruling that Viacom was not entitled to  contractual indemnification, and thus was required to release escrow funds. A prior Supreme Court decision in this case from July 2013, regarding arbitrability, was highlighted on these pages … Continue Reading

Chancery Addresses Default Fiduciary Duties in LLC and Advancement Issues

Zimmerman v. Crothall, C.A. No. 6001-VCP (Del. Ch. Jan. 31, 2013) Issue Presented  This 74-page opinion addresses the allegations of a minority unitholder in an LLC who asserts claims that the directors breached their fiduciary duties in connection with several financing transactions. Brief Overview  Zimmerman claimed that the challenged transactions should be analyzed under the … Continue Reading

Chancery Rejects Viacom’s Indemnification Claim

Winshall v. Viacom International, Inc., C.A. No. 6074-CS (Del. Ch. Dec. 12, 2012). Key Issue Addressed: Whether an indemnification clause in the merger agreement covered $28 million in legal fees incurred to defend post-merger claims.  Short Answer:  No. Brief Factual Background Viacom bought Harmonix in Sept. 2006 for $175 million in cash and an earn-out … Continue Reading

ABA Panel Presentation on D&O Liability, Advancement and Indemnification

Kevin F. Brady and Francis G.X. Pileggi were part of a panel presentation entitled:  “Protecting the Corporate Director” at the American Bar Association’s Business Law Section Spring Meeting at Caesars Palace in Las Vegas last month.  The focus of the panel was on director and officer liability, as well as indemnification and advancement, including insurance … Continue Reading

Indemnification and Advancement Issue of First Impression Decided by Chancery

Hermelin v. K-V Pharmaceutical Company, C.A. No. 6936-VCG (Del. Ch., Feb. 7, 2012). Issues Addressed The Court of Chancery addressed an issue of first impression in Delaware regarding: “what evidence is relevant to an inquiry into whether an indemnitee acted in good faith for the purposes of permissive indemnification” under DGCL §§145(a) and (b). The Court also addressed: (1) Whether … Continue Reading

Chancery Distinguishes Between Promise and Condition in Contract to Deny Indemnification Claim

In TravelCenters of America LLC v. Brog,  (Del. Ch., Dec. 5, 2008), read opinion here, the Chancery Court denied a claim for indemnification based on the argument that the provisions of the parties’ LLC agreement  were breached. The Court reached this conclusion notwithstanding its reasoning in an earlier opinion that the notice provisions of the agreement were not complied with in … Continue Reading

When “Indemnification” Also Refers to “Advancement”

 Sodano v. American Stock Exchange LLC, 2008 WL 2738583 (Del. Ch., July 15, 2008), read opinion here.   This Chancery Court decision interprets corporate documents and a settlement agreement to determine rights to advancement of legal fees. The court observes that the word “indemnification” as used by the parties in the relevant documents in this case … Continue Reading
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