Richards Layton & Finger

Recent Delaware Court of Chancery Opinion Provides Guidance on Advancement and Indemnification

October 2015

A recent opinion of the Delaware Court of Chancery provides guidance on drafting indemnification and advancement provisions, and clarifies the circumstances under which a director or officer may or may not be entitled to advancement “by reason of the fact” of his or her service as such. The Court held, among other things, that a provision of a certificate of incorporation extending mandatory advancement rights to a director or officer, without specifying that it applied to both current and former directors and officers, only applied to current directors and officers.