In the third decision issued by the Court of Chancery in connection with the action styled as Holley v. Nipro Diagnostics, Inc., C.A. No. 9679-VCP (Del. Ch. Aug. 14, 2015) (prior posts on the December 23, 2014 Holley I decision can be found here and here), Vice Chancellor Parsons ruled on whether a claim for advancement to the tune of $294,262.96 in consulting fees incurred by Holley related to an SEC action which was covered for advancement by prior order dated December 23, 2014 (Holley I), or a criminal proceeding, the costs of which were held not to be subject to advancement under Holley I.

In the present action, defendant Nipro sought an order that such expert fees solely related to the criminal proceeding which was not subject to advancement.  In this opinion, the Court was disinclined to hold that such expenses solely related to the non-advanceable claim.  Rather than make such a distinction at this stage, the Court stated as follows:

This Court previously has held that, in actions where only certain claims are advanceable, the Court generally will not determine at the advancement stage whether fee requests relate to covered claims or excluded claims . . . [.]  Oftentimes, it cannot be done easily and will be deferred to the indemnification stage.

Accordingly, Vice Chancellor Parsons found it was more appropriate to make such a determination as to whether the expert fees in question related to the covered proceeding until the indemnification stage of the action.  Moreover, of note the Court also found that Plaintiff was entitled to his fees in bringing such action for advancement.

If you would like to speak to a litigator in Fox Rothschild’s Delaware office, please reach out to Sid Liebesman (302) 622-4237 or Seth Niederman (302) 622-4238.