I’ve previously written in a general fashion on the topic of advancement of legal expenses here, but the Delaware Court of Chancery’s most recent opinion, in addition to being a unique read, provides additional insight and information on the topic for those looking to learn more.
On December 28, 2010, the Delaware Court of Chancery issued an oral opinion (Katzman v. Comprehensive Care Corp., No 5892-VCL), which can be read here in transcript form, regarding the often-overlooked and critical distinction between two entirely different legal concepts: advancements for legal expenses and indemnification. A portion of the transcript identifying the often-overlooked distinction reads:
. . .I’m going to start with a few basic principles of indemnification and advancement rights that don’t seem to be fully understood but which have [a] controlling impact on this case. The first is that indemnification and advancement are separate and distinct.
Transcript at p.4 ln 10-17 (emphasis added). The opinion goes on to further describe the numerous distinctions between the widely misunderstood, yet frequently intermingled, legal concepts.
In addition to expounding upon the significant distinctions between the two legal concepts, the Court also addresses when, during litigation, the right to advancement ends. Citing other opinions, the Delaware court made clear that advancement rights extend beyond the trial stage of litigation and include appeals: “An advancement right remains live until the final disposition of the claim on the merits. Final disposition includes the resolution of any appeal. Thus, advancement rights remain live through appeal.” See Transcript at p. 8 ln 16-23.
For those looking to learn more about advancement rights and relevant cases on the topic, the opinion is also helpful as it is full cites to several cases on the issue.
Finally, the opinion provides unique insight and instruction, from a judge’s point of view, regarding the filing of Rule 11 motions – a very interesting read. See Transcript at p. 13-17.
Innovative Litigation, L.L.C., as owner and host of this site, and Matthew McKinney as the author (acting on behalf of and through Innovative Litigation, L.L.C.) cannot and does not warrant the accuracy or reliability of the information presented on or through this site. The law can and does change over time and the information contained herein may not reflect the most recent laws – whether statutory law, administrative law, case law, constitutional law, or otherwise. The information on this website does not constitute legal advice and readers should not rely on it to solve problems or other matters. Further, you should seek licensed counsel in the appropriate legal jurisdiction before taking any action. Any information provided on this site is presented “As Is” for your personal curiosity and enjoyment. It is not meant to be relied upon for legal advice, counsel, or for any other purposes. Such information does not take the place of a lawyer. Rules and laws differ by jurisdiction and the information contained within this website may not apply in your jurisdiction. The appearance of articles, listings, or ads, by or for professionals, on this site, does not constitute an endorsement. In all cases, you are responsible for determining the quality of services, information, and/or advice provided by professionals through, or as a consequence of, your use of this site. Neither liability nor responsibility shall arise to any person or entity with respect to loss or damage caused (or alleged to be caused), directly or indirectly, by information posted on this website, or by reason of contact with a professional listed on, or posting information to, this site. No attorney-client relationship is formed by viewing this website and practice is limited to jurisdiction where lawyers are admitted. The information furnished on the website is only general and not a substitute for personalized legal advice. Legal advice cannot be given without full consideration of all relevant information relating to the individual(s) situation. Laws can change daily and new laws may, and likely will, affect the accuracy of the information herein. The information herein may be outdated and replaced by new law.
If you are seeking representation, please read the following notice before sending an e-mail:
Sending an e-mail will not make you a client. Until an agreement regarding representation is reached with you, anything you send will not be confidential or privileged. Before representation can occur, a lawyer will first take you through the conflict of interest procedure and see that you are put in touch with the lawyer best suited to handle your matter.
If you proceed with an e-mail, you confirm that you have read and understood this notice.