Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Attorney Fees

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Delaware Prepares To Eliminate Fee-Shifting Bylaws And Charters

Posted in Attorney Fees
The Delaware State Bar Association is submitting new legislation that will prohibit the use of fee-shifting bylaws or corporate charters for litigation involving “intracorporate” disputes.  A copy of the proposed bill with commentary is available here.  The result would be to limit the Delaware Supreme Court’s decision in ATP Tour Inc. v. Deutscher Tennis Bund,… Continue Reading

Court Of Chancery Awards Fees To A “Bad Guy”

Posted in Attorney Fees
Holley v. Nipro Diagnostics Inc., C.A. 9679-VCP (December 23, 2014) It is often thought that if a former director is convicted of wrongdoing there is no need to indemnify her for defense fees. That simplistic view overlooks what may be a reimbursement right the company’s bylaws adopted when all were friendly. But as this decision… Continue Reading

Supreme Court Bars Fees For Dismissed Case

Posted in Attorney Fees
Crothall v. Zimmerman, No. 608, 2013 (June 9, 2014) In what the Court itself characterized as an unusual case, the Supreme Court denied a fee to the lawyers for a plaintiff who won a small victory for their plaintiff stockholder.  Unfortunately for the lawyers, their client sold his holdings and thereby lost any standing to… Continue Reading

Court Of Chancery Requires Advancement Absent The Word “Advancement”

Posted in Attorney Fees
Fillip v. Centerstone Linen Services LLC,  C.A. 8712-ML (February 27, 2014) Too often corporate documents refer to "indemnification" when they really mean "advancement."  Here the Court was required to interpret an agreement that really called for advancing attorney fees but did not use the word "advancement."  Hence, even if the right terminology is not used… Continue Reading

Court Of Chancery Denies Advancement

Posted in Attorney Fees
White v. Kern, C.A. 7872-VCG (transcript, January 24, 2014) This ruling illustrates an often overlooked point that the decision to advance attorneys’ fees may constitute a self-dealing transaction when the party getting advancement is the party voting to do so. Hence, absent a proper basis, advancement is improper under those circumstances.  Of course, when advancement… Continue Reading

Master in Chancery Summarizes Advancement Law

Posted in Attorney Fees
Fillip v. Centerstone Linen Services LLC, C.A. 8712-ML (December 3, 2013) This is an excellent summary of the Delaware  law on advancement and why all the arguments against improvidently granted advancement rights are wrong.  For example, it explains why the right to be "defended’ includes advancement, but the right just to be indemnified does not.  In… Continue Reading

Court Of Chancery Calculates Benefit Conferred

Posted in Attorney Fees
In re Quest Software Inc. Shareholders Litigation, C.A. 7357-VCG (November 12, 2013) This is an interesting decision because it involves calculating how much litigation contributed to an increase in merger consideration when a competing bid drove the merger price up. There is no formula to apply to reach the result. Significantly, the attorneys were aided by… Continue Reading