In the case of Pontone v. Milso Industries Corp., C.A. No. 8842-VCP (Aug. 22, 2014), Vice Chancellor Parsons addressed the issue of from which source a director or officer may seek advancement of legal fees when multiple sources are implicated. Here, plaintiff was a former director and officer of two different companies with advancement rights from each.

The Court found that a plaintiff may choose from which source to seek advancement when there are multiple sources.

In addition, the Court found that a director may seek advancement of “fees on fees”, which is consistent with prior Delaware opinions.  Here, plaintiff was found to be entitled to 75% of his “fees on fees” – in determining such an award, the Court will look at the level of success achieved by plaintiff, along with an assessment of the issues at stake.  See id., slip op. at 62.

Finally, the Court found that plaintiff was entitled to advancement for his counterclaim against the company for defamation.  In so finding, the Court stated that the counterclaim was compulsory, and a “necessary part of the same dispute.”  Id. at 58.

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.