The potential liability of a director for attorney’s fees is what determines whether recoverable litigation expenses are due under the indemnification provisions of Delaware law, the Chancery Court holds.
The expenses at issue were incurred in litigation that wound its way through state and federal courts in Illinois for nearly a decade, including a bankruptcy. The Plaintiff in Dore v. Sweports, Ltd, C.A. No. 10513-VCL (Del. Chancery January 31, 2017) was a former director and investor in Sweports, who was ousted in a dispute with the other directors and locked out of the business. A significant component in the lawsuit involved the services of the law firm that was general counsel and also represented the plaintiff in some of the underlying litigation.