Very recently, we wrote on the Andrikopoulos decision of Vice Chancellor Parsons (Andrikopolous v. Silicon Valley Innovation Company, LLC, C.A. No. 9899-VCP (Del. Ch. July 30, 2015), which held that, in a matter of first impression under Delaware law, claims for advancement by directors or officers against a company in receivership should be treated as non-priority unsecured claims against the receivership estate.
In a letter opinion dated August 4, 2015 in Henson, et al. v. Sousa, C.A. No. 8057-VCG (Del. Ch. Aug. 4, 2015), Vice Chancellor Glasscock similarly denied a claim for advancement against an entity in receivership based upon, among other things, the ruling of Andrikopoulos. Adopting the recent ruling of Andrikopoulos, the Court found that advancement claims against an entity in receivership should not be afforded priority status over claims of other creditors.
Carl D. Neff is a partner with the law firm of Fox Rothschild LLP. Carl is admitted in the State of Delaware and regularly practices before the Delaware Court of Chancery, with an emphasis on shareholder disputes. You can reach Carl at (302) 622-4272 or at email@example.com.