A corporation’s advancement obligation must be honored even when the ex-employee was the subject of criminal charges, if the fees incurred were intertwined with the defense of a civil enforcement action, a Delaware Court of Chancery judge has said in a letter opinion.
Vice Chancellor Donald F. Parsons Jr., addressing the lawyers in Holley v. Nipro Diagnostics, said the ex-employee was entitled to nearly $300,000 in advancement for the work of consultants preparing a response to a federal Securities and Exchange Commission civil investigation into insider trading. The work was also used in defense of criminal charges that were brought by the U.S. attorney for the District of New Jersey, Parsons said.
