Two recent decisions from the Delaware Court of Chancery address well-settled but important nuances of the right to advancement.  A third ruling leaves a gap in this area of the law: other than fees on fees, what remedy is available, if any, for the denial of advancement over several years until it is granted after appeal.

In Lippy v. Mixedbread AI, Inc., C.A. No. 2026-0493-DH (BWD) (Del. Ch. Oct. 19, 2026), the court’s letter ruling affirmed the “well-reasoned decision” of the magistrate and upheld the holding that fees are advanceable for responding to affirmative defenses to a complaint against the covered officer, which implicated his performance as a corporate official. The court cited several decisions for the well-settled position that fees incurred for “defending against” affirmative defenses are advanceable.  Id. at 4. See cases cited at footnote 1. The court rejected the argument that fees related to the affirmative defenses were not covered because they were not incurred “by reason of the fact that the plaintiff is or was an agent of the corporation”. The court also noted that it was premature to decide whether the fees were “reasonably incurred” at the entitlement stage. See footnote 3.

In a second ruling, in the matter of Walker v. Icon Management Aggregator L.P., C.A. No. 2026-0733-CDW, Order (Del. Ch. Oct. 21, 2026), the court cited to well-settled caselaw to explain that fees incurred to pursue compulsory counterclaims were covered by advancement.

The court instructed that fees for the counterclaims are advanceable because they arise from the same dispute and serve to defeat or offset the claims against the defendants in the underlying action. The underlying action sought declarations that an amendment to a partnership agreement that the former CFO was a party to, regarding a call right and notice exercising that right, was valid and enforceable.

The court recited the familiar two-part test to determine when a mandatory counterclaim is advanceable: if it is (1) “necessarily part of the same dispute, in the sense that it qualifies as a compulsory counterclaim under the prevailing Delaware and Federal procedural standard,” and (2) “advanced to defeat, or offset the affirmative claims”.  Id. at 9 (citations omitted). The court also relied on caselaw explaining the two-part test and reasoned why, as applied to this case, that authority supported advancement. The court also predictably granted fees-on-fees to the extent of success on the merits of the advancement claims.  Id. at 15. Although these two short decisions are unremarkable, they remind us of important nuances of well-settled advancement law, and to that extent are noteworthy.

The third recent Chancery decision involving advancement is notable for what it does not say. In Invictus Special Situations Master I, L.P. v. Invictus Global Management, LLC, et al., C.A. No. 2023-1099 NAC (Del. Ch. Nov. 5, 2026), the court refused to grant a remedy, based on the facts of the case, for the denial of advancement for over two years–until the Delaware Supreme Court granted it after an interlocutory appeal. That high court decision was highlighted on these pages.

Other than granting fees-on-fees, I am not aware of a decision that addresses a gap in the law on this topic regarding the irreparable harm that follows the denial of advancement for several years–all the while forcing a defendant to fund his own defense, contrary to the public policy behind advancement.

The most recent letter ruling recounted the tortuous and tormenting procedural history over several years of the case–but did not note that our firm only entered their appearance in the case about two months before this latest decision, taking over for another firm that handled the case from the beginning.

This article first appeared in the Delaware Business Court Insider and is reprinted here with their kind permission.

By: Chauna A. Abner and Francis G.X. Pileggi

            The Delaware Court of Chancery recently issued  a post-trial order that pushes the bounds of what constitutes “books and records” under the newly amended books and records provision of the Delaware General Corporation Law, Section 220.

            The 2025 Amendments to Section 220 narrowed the definition of “books and records” stockholders may have a statutory right to demand to inspect:

  1. The “certificate of incorporation,” . . . including a copy of any agreement or other instrument incorporated by reference in the certificate of incorporation.
  • The bylaws then in effect, including a copy of any agreement or other instrument incorporated by reference in the bylaws.
  • Minutes of all meetings of stockholders and the signed consents evidencing all action taken by stockholders without a meeting, in each case for the 3 years preceding the date of the demand . . .
  • All communications in writing or by electronic transmission to stockholders generally within the past 3 years preceding the date of the demand . . .
  • Minutes of any meeting of the board of directors or any committee of the board of directors and records of any action of the board of directors or any such committee.
  • Materials provided to the board of directors or any committee of the board of directors in connection with actions taken by the board of directors or any such committee.
  • Annual financial statements of the corporation for the 3 years preceding the date of the demand[.]
  • 8 Del. C. § 220(a)(1).
  •             On October 5, 2026, Magistrate Wright issued an order holding that the plaintiff stockholder was entitled to, among other things, the corporation’s current capitalization table. See Mendoza v. Distributed Creation, Inc., C.A. No. 2026-0580-CDW, Order (Del. Ch. Oct. 5, 2026). The Court acknowledged that “[t]he capitalization table is not one of the Section 220(a)(1) books and records, but” found that “plaintiff ha[d] demonstrated by clear and convincing evidence [that] the Company’s current capitalization table is necessary and essential to his valuation purpose and plaintiff has shown a compelling need for it under Section 220(g).”  
  • By way of background, the corporation had already provided the stockholder with the corporation’s 2025 financial statements and stockholder list. Pursuant to Section 220(b)(1)(a), a stockholder may also be entitled to inspect the corporation’s list of stockholder.
  • But the Court explained that while the financial statements provided information about the corporation’s value, the stockholder list did not explain how that value is allocated among the differing shares. The Court held that for the stockholder to meaningfully value his interests, he needed to know “[l]iquidation preferences, conversion rights, and other rights” that are delineated in a capitalization table. The Court did, however, hold that capitalization tables dating back to 2024 were not necessary and essential for valuation.
  • This decision is one of many more to come of the Court grappling with the new statutory definition of “books and records” in Section 220.

The latest episode of our podcast called Delaware Corporate Litigation Insights features the Editor-in-Chief of The Chancery Daily, Lauren Pringle.

How is Delaware’s Court of Chancery adapting to a rapidly growing caseload, and what does the future hold for one of the nation’s most influential business courts?

Drawing on her years of experience covering every ruling of the Court of Chancery, and virtually every court filing, Lauren discusses its remarkable growth, the challenges of managing an increasingly demanding docket, and how the court is adapting while preserving the qualities that distinguish Delaware’s judiciary. The conversation also explores the rise of specialized business courts in other states, including Texas, and how their approaches compare with Delaware’s. Looking ahead, Lauren discusses how technology, artificial intelligence, and evolving judicial practices could reshape the administration of corporate justice.

Listen to the full episode for a candid look at the Court of Chancery’s evolution, the pressures shaping its future, and what these developments mean for corporate litigators and the businesses they represent.

A recent Delaware Court of Chancery decision addressed the obligation of a company to maintain an accurate stock ledger. In Mitchell Partners, L.P. v. AMFI Corporation, C.A. No. 2020-0985-KSJM (Del. Ch. Oct. 1, 2026), the court explained in a post-trial opinion why, based on the facts of this case, there was no remedy available for an initial breach of this duty primarily because the company fixed the problems with the stock ledger after they were brought to its attention.

Although one might not be surprised to find a stock ledger poorly maintained in a small company, the company involved in this case was formerly a publicly-traded insurance company with a transfer agent, but for almost 30 years they failed to accurately record Class B stock and who it was transferred to.

One of the most enjoyable parts of this decision are two of the words the court uses in its introductory overview of the case. The court described the indignant posture that the defendant took early in the litigation, “appearing to dismiss much of the plaintiff’s legal pursuit as quixotry.” This is an unusual version of the word quixotic and one that I hope to use in the future.The court also concluded its introduction by saying that the post-trial decision “ends the imbroglio.” That’s one of my favorite words; it is borrowed from Italian.

I only highlight the parts of this decision that I find most noteworthy or interesting, although there is much to commend this 40-page post-trial decision that deserves to be read in full to appreciate all the detailed facts and procedural history that give context to the legal highlights.

Highlights

  • In essence, the court explained that if a corporation fixes its stock ledger problems, at least based on the facts of this case, no further relief is warranted. Slip op. at 24-25.
  • The problem the plaintiff had in this case is that it was not a stockholder at the time that the Class B shares—that were only recently made known to the plaintiff—were issued. Therefore he did not have standing to challenge the issuance.
  • Lawyers should be aware that Delaware law imposes a duty on companies to maintain a proper stock ledger. Slip op. at 18. See also footnotes 95, 96 and 108 which refer to prior decisions in this case that more fully explain that duty, e.g., Mitchell Partners, L.P. v. AMFI Corporation, C.A. No. 2020-0985-KSJM, Report and Recommendation (Del. Ch., Oct. 2, 2023) (referring to definition of stock ledger in § 219(c) as different than stock list and § 224 which describes the details for maintaining a stock ledger).
  • The court explained that Delaware law requires a company stock ledger to account for all of its stock, including non-voting shares. Slip op. at 18.
  • The court discussed the important principle that a board “may not delegate board action in full to an advisor.” Slip op. at 34 (citation omitted).
  • But the court distinguished between delegation and reliance. Id.
  • The court observed that the prohibition against delegation of board action

“includes delegating a core function to someone else and agreeing to be bound by that person’s determination. But a board may rely on advisors and employ non-directors to assist them in arriving at the value to be placed on the property to be received in exchange for the corporation’s stock. Reliance assumes knowledge of the valuation.” (internal quotations and citations omitted).

A recent Chancery decision rejected several defenses to advancement, including the commonly unsuccessful argument that the claims in the underlying case were not made against those seeking advancement in their capacity as former officers. In Esposito v. Drivers History Information Sales LLC, C.A. No. 2026-0579-DG, Order (Del. Ch. Oct. 2, 2026)(Gibbs, M.), the Court also granted the routine fees-on-fees as well as interest on unpaid amounts.

A recent webinar presented by Lewis Brisbois’ Directors and Officers Litigation Practice Group, for CLE credit, discussed why recent developments do not suggest an imminent change in Delaware’s status in the corporate world. We provide statistics on the number of entities formed in Delaware being higher than ever for 2025, and we also address recent cases that are used by both sides of the DExit debate in a PowerPoint.

Our latest Delaware Corporate Litigation Insights podcast discusses the recent Chancery decision highlighted on these pages in Hassanein v. NTO Fund I, LLC, that provides 21 reasons why an LLC is not simply a creature of contract. Delaware corporate litigator Kurt Heyman examines the implications of this decision with hosts Francis G.X. Pileggi and Chauna Abner.

This synopsis was prepared by Chauna Abner, a corporate and commercial litigation partner at Lewis Brisbois.

In Freiberg v. Xonar Technology Inc., C.A. No. 2026-0093-KSJM (Del. Ch. Sep. 15, 2026), Chancellor McCormick rejected a director’s Section 225 challenge to his removal based on written consents in lieu of a shareholder meeting after a paper trial.

In a nutshell, stockholders executed written consents to remove Gregory Freiberg from the Company’s board, and prompt Section 228(e) notice was given the next day. Freiberg filed a Section 225 action contending that the cap table was wrong and the written consents lacked majority support.

In response to an objection to the initial written consents, about three weeks after the original written consents were executed, the Company obtained two additional consents from Brian and Jeff McFadden (“McFadden Consents”). The Court held that these consents were valid.

The Issues

To keep the summary proceeding on track, the Court entered an order adopting the Company’s stipulations and narrowing the issues for trial to two: (1) whether the court could count the later – obtained McFadden Consents, and (2) what methodology should apply to compute Freiberg’s share ownership.

The Company stipulated to key facts, consistent with Section 225 being an expedited proceeding on narrow issues.

Key Holdings & Reasoning

The Court held that the McFadden Consents were valid. Freiberg could not prove that his removal from the Board was invalid. Thus, the Court entered judgment for the Company, without needing to reach the share‑ownership methodology question.

Counting later consents: The Court held that Section 228 of the DGCL permits stockholder action by multiple written consents signed on different dates within 60 days, and the action becomes effective upon delivery of the last consent needed to reach a majority.  The later-obtained McFadden Consents were within the 60‑day window and could be aggregated with the original consents.

Retroactivity challenge: The Court rejected the argument that the McFadden Consents were “backdated,” reasoning that the consents specified no effective date, and, in any event, under Section 228 the effective date is when the final requisite consent is delivered. Therefore, the Court found that there was no improper retroactive application of the consents.

Fiduciary‑breach solicitation theory: The Court declined to set aside the McFadden Consents on equitable grounds, reasoning that Freiberg failed to prove any material misstatement or omission in the solicitation since the company’s communications disclosed that removal had already been effected and that Freiberg was challenging it, and the McFaddens did not testify that any undisclosed fact would have been material to their decision.

The Court also found no improper inducement. The Court reasoned that texts about updates or visits did not amount to bribery, and the record reflected the McFaddens’ long‑standing involvement and independent engagement.

Practical Takeaways

  • Section 228 consents can be collected over time within the 60‑day window and aggregated.
  • Labeling a consent with an “effective date” does not override Section 228’s statutory mechanics; the operative date is when the last necessary consent is delivered.
  • Section 225 remains a narrow, expedited vehicle focused on the validity of elections/removals; the Court will cabin discovery and accept targeted stipulations to preserve summary character.

The Delaware Court of Chancery explained the reasoning for a specific award of attorneys’ fees based on a post-trial decision earlier this year, highlighted on these pages, that discussed the basis for awarding fees in a case involving breach of fiduciary duty, breach of a restrictive covenant, and related breaches.  Arxada Holdings NA Inc. v. Harvey, C.A. No. 2024-0771-JTL, Order (Del. Ch. March 13, 2026)

Highlights

  • The exercise of its discretion to determine the reasonableness of an award of attorneys’ fees does not require the court to review every time entry or disbursement. Order at 1. (citation to case law omitted). See Rule 1.5(a).
  • Nor does it require the court to judge the appropriateness of a decision to file a particular motion or pursue a particular argument or litigation tactic. Id.
  • The court found the number of hours spent to be reasonable in light of the work done, and noted that the litigation conduct of the defendant added to the amount of time required. Order at 2.
  • The court determined that the hourly rate was reasonable. The Order does not reveal the hourly rate, but from other filings in the case, we estimated that the hourly rate for partners included four digits.
  • The court declined to second-guess the staffing decisions, such as the argument that too many partners were working on the case, while observing that partners can often do certain tasks more quickly and efficiently than an associate. Id. (citation omitted).
  • Refusing to examine specific time entries, the court deferred to the “judgement call” of counsel and that a sufficient monitoring mechanism is the client who initially reviews the bill while not being guaranteed that fees will be shifted. Order at 2-3 (citations omitted).
  • Rejecting the argument that fees should not be awarded for motions that were not successful, the court reasoned that: “A party cannot expect to win on everything. Litigating a case involves a number of intertwined decisions.” Order at 3. (citation omitted.)