Court Of Chancery Explains Right To Advancement For Pre-Merger Conduct

Danenberg v. Fitracks Inc., C.A. 6454-VCL (January 3, 2012)

Delaware officers and directors are usually entitled to have their litigation expenses advanced when they are sued for their conduct in those corporate capacities.  Exactly what conduct is alleged to be wrongful is key to determining if that right to advancement applies.  For example, if after a merger a director ceases to be a director, then he is not entitled to advancement for litigation over that conduct.  This decision illustrates how the Court will decide what conduct is involved in the underlying litigation so as to decide if advancement is required.

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