The Delaware Supreme Court recently affirmed the Chancery Court’s ruling on advancement of litigation expenses for a former officer, but in Kaung v. Cole National Corporation, download pdf file, the court held that the nature of a summary proceeding for advancement is too limited to address the related but distinct issues of indemnification or recoupment of amounts voluntarily advanced. The court also spent considerable time in the opinion to reaffirm the importance to the Delaware Courts of civility in legal proceedings. In affirming the Chancery Court’s shifting of fees against the plaintiff for “bad faith” tactics, the Supreme Court directly put lawyers “on notice”, as it has in past cases, that it would continue to affirm the imposition of fees against lawyers who engage in “abusive litigation tactics”, including inappropriate conduct by parties themselves during their depositions.
UPDATE: Here is my post about the Chancery Court’s decision after remand.