The Delaware Court of Chancery is scheduled to hear post-trial oral argument in connection with its expected ruling on a claim for advancement by the ex-CEO of Massey Energy, a coal mining company, who is scheduled to go on trial for criminal charges in connection with the death of 29 minors. One of the issues is whether an agreement can modify rights otherwise mandated (once triggered) by Section 145 of the Delaware General Corporation Law.
Recent Chancery decisions on advancement have shown both judicial impatience and disquietude with companies that do not pay advancement when the court determines that those payments had been required–notwithstanding arguments the company may have for not paying. Past decisions have found some provisions in agreements that purport to limit advancement to be in conflict with the provisions of Section 145. Those same decisions have described this type of corporate litigation to be both contentious and expensive.
Frank Reynolds of Thomson Reuters has written a helpful overview with background details on the case. A few days ago I provided a link to a chapter I wrote on recent key decisions about advancement cases around the country (including Delaware).