Limiting Obligation To Advance Legal Fees

Law360, New York (March 20, 2009, 12:00 AM EDT) -- Government investigations and shareholder litigation frequently last several years, leaving companies with an expensive obligation to pay legal fees for officers and directors who are targets, defendants or even mere witnesses. This obligation often arises from written employment agreements or a company’s articles of incorporation.

One issue with such payments is whether the company must pay the fees as they are incurred (advancement) or only at the conclusion of the dispute or investigation (indemnification). Under Delaware law, these two rights have consistently been held to be...
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