8 Del. Code Ann. § 145

Section 145 covers indemnification for litigation expenses when a person successfully defends a suit arising from service as an officer of another corporation at the indemnifying corporation’s request.

A.D.M. Corp. v. Thomson · filed 1983-05-24

Delaware, the other relevant incorporating state, has a very similar statute. See Del.Code Ann. tit. 8, § 145; ... Thomson fits within the scope of these statutes. He was asked to manage Frost by the president of both controlling corporations. He was sued for a breach of a fiduciary duty; thus his legal expenses arise “by reason of his being” an “officer, ... employee or agent” of Frost. ... Consequently, the judgment below is reversed in so far as it disallows indemnification, and the case is remanded for a determination of the amount of an appropriate award.

Section 145(a) can permit indemnification when a suit arises from a person's role or status as a director, even if the suit does not allege a breach of director duties.

Fed. Sec. L. Rep. P 96,813 Daniel E. Heffernan v. Pacific Dunlop Gnb Corporation, a Delaware Corporation, and Gnb Incorp · filed 1992-06-05(a)

We believe that Delaware's "by reason of the fact that" phrase is broad enough to encompass suits against a director in his official capacity as well as suits against a director that arise more tangentially from his role, position or status as a director.

Section 145(a) permits courts to consider the substance of the underlying suit and a person’s corporate role when deciding whether the person was sued by reason of that role; the pleadings alone do not control.

Grove v. Daniel Valve Co. · filed 1994-04-07(a)

Assessing the complaint in this manner, looking for ways in which a party’s role as director, officer, employee or agent is implicated in the underlying lawsuit, precludes another party from crafting the petition to avoid any obligation to indemnify. Thus, we reject appellee’s argument that the pleadings must be the sole arbiter of indemnification rights.

Section 145(a) requires a nexus between the lawsuit and the person’s corporate service; it does not cover personal conduct wholly outside and before that service.

In the Matter Of: William L. Miller, Debtor. Gaines West, Chapter 7 Trustee v. Balfour Beatty Construction, Inc. Balfour · filed 2002-04-24(a)

Instead, we hold that no nexus existed because, as the state court judgment revealed, the lawsuit related to conduct that occurred when Miller was not employed by the indemnifying company, and Miller’s personal motives, rather than Balfour Beatty’s corporate functions, were the primary reason for the conduct giving rise to the lawsuit. The scope of corporate indemnification under Delaware law, while justly broad, cannot cover individual conduct by a person that is wholly outside and indeed prior to his corporate employment.

Section 145(a) permits indemnification of outside counsel as a corporate agent when the counsel’s work extends to third parties and gives rise to the claim against him.

Vergopia v. Shaker · filed 2006-02-22(a)

Here, in our judgment, a similarly close analysis of the allegations presented against Zelnick in the course of the Vergopia litigation support a conclusion, for the reasons we have cited, that Zelnick's role extended to and impacted upon third parties. Thus, even within the parameters set forth by Fasciana, supra, 829 A. 2d 160, he may be deemed an agent of Hometown and entitled to indemnification for the legal expenses he incurred.

Section 145 permits a corporation to indemnify its agents but does not require it to do so.

Vergopia v. Shaker · filed 2007-06-11(a)-(c)

However, neither section 145 of the Delaware General Corporation Law nor Hometown's corporate documents requires Hometown to indemnify its agents. Rather, section 145 merely permits a corporation to indemnify its agents.

Section 145 indemnification requires a causal connection between the claim and the person’s corporate role.

U.S. Gas & Electric, Inc. v. Big Apple Energy, LLC · filed 2009-11-02(a), (b)

Accordingly, the Court finds that Ferreira is not entitled to indemnification under Section 145 because USGE’s fiduciary duty claim was not asserted against Ferreira “by reason of the fact” that he was a USGE director.

Section 145 indemnification is plausibly pleaded when factual allegations link the alleged wrongdoing to the claimant’s role as a director, making it plausible that the claimant was sued by reason of that role.

U.S. Gas & Electric, Inc. v. Big Apple Energy, LLC · filed 2010-04-10

In other words, although USGE’s position that Ferreira was sued only in his capacity as the principal of BAE is tenable, based upon these new allegations, it is also at least plausible that he was sued “by reason of the fact” that he was a USGE board member. This is all that is required at the pleading stage.

Section 145(a) permits, but does not require, a corporation to indemnify a director sued because of the director’s position.

Heffernan v. Pacific Dunlop GNB Corp. · filed 1991-06-28(a)

Thus, section 145(a) permits, but does not require, a corporation to indemnify a director sued because of his position.

Section 145(a)’s “by reason of the fact” requirement is met when the claims arise from the person’s former corporate office, even without an express breach of fiduciary duty claim.

Pontone v. Milso Industries Corporation · filed 2014-08-22(a)

Having re-examined the amended complaint in the Pennsylvania Action, I find that, notwithstanding these distinctions raised by New Milso, Scott was made a party to the Pennsylvania Action ―by reason of‖ his former corporate office.

Section 145 requires a causal connection between the underlying claims and a person's official corporate capacity to obtain advancement under an agreement using the statute's “by reason of the fact” standard.

Charney v. American Apparel, Inc. · filed 2015-09-11(a)-(b)

For the reasons explained below, I construe this phrase as used in the Indemnification Agreement to be equivalent to the phrase “by reason of the fact” found in Section 145 of the Delaware General Corporation Law, which requires a nexus or causal connection between the claims in the underlying proceeding and one’s official corporate capacity to obtain advancement.

Sections 145(a) and (b) permit indemnification of former officers only for claims connected to their corporate service; claims concerning personal contractual obligations do not qualify.

Lionel D. Batty v. UCar International Inc. · filed 2019-04-03(a)–(b)

Sections 145(a) and 145(b) permit corporations to indemnify former officers for claims brought “by reason of the fact” that they served as officers. ... The claims in this case concern specific and limited contractual obligations—those set forth in the Agreement. This litigation does not challenge Batty’s exercise of judgment, discretion, or decision-making authority on behalf of the corporation. Accordingly, the claims are not “by reason of the fact” that Batty served in a covered capacity.

Section 145’s “by reason of” standard is met when a proceeding has a nexus or causal connection to a person’s corporate capacity.

Paul A. Rhodes, Ph.D. v. bioMérieux, Inc. · filed 2024-02-19

Defendants also contend that Plaintiff is not entitled to advancement in connection with Defendants’ Superior Court Action because the claims raised in that action are not brought “by reason of the fact” that Plaintiff is or was a director or officer of Specific. I disagree. ... The “by reason of” language in the Bylaws and the Indemnification Agreement tracks language in Section 145. “A proceeding is ‘by reason of the fact that’ a person is a director ‘when “a nexus or causal connection” exists between the underlying proceeding and the official’s “corporate capacity.”’”

Section 145’s “by reason of the fact” standard covers proceedings causally connected to a person’s official duties.

Freeman Family LLC v. Park Avenue Landing, LLC · filed 2019-04-30(a), (b)

I hold that in the case before me the parties intended to import corporate case law as indicated by their decision to use contractual language that mirrors 8 Del. C. § 145. ... As a result, I hold that the New Jersey action satisfies the “by reason of the fact” or “official capacity” requirement.

Section 145(h) extends indemnification rights to personnel of a constituent corporation absorbed in a merger or consolidation; an acquired company that remains a subsidiary does not qualify on that basis.

Rekor Systems, Inc. v. Loughlin · filed 2020-11-23(h)

Section 145 of the DGCL, which addresses the indemnification of corporate officers and directors, informs the appropriate interpretation of “predecessor corporation.” ... Thus, “predecessor corporation” as used in the Rekor Bylaws is best understood as a “constituent corporation . . . absorbed in a consolidation or merger” as used in the DGCL.

Section 145’s “by reason of the fact” requirement covers a proceeding when its claims have a causal connection to a person’s official corporate conduct, even if the claims arise under another entity’s contract.

Kezirian v. World College of Refractice Surgery and Visual Sciences PBC · filed 2026-02-13

The “by reason of the fact” nexus in the Bylaws is not a creation of the Defendant; it is an express incorporation and adoption of the known meaning of that language as used in 8 Del. C. § 145.

Section 145 permits indemnification for an action involving an officer by reason of the officer’s corporate role; personal loan obligations do not qualify.

AlSayer v. OmniX Labs, Inc. · filed 2026-03-11

But AlSayer was not made a party to any threatened litigation by KNF (to the extent it exists) “by reason of the fact that” she was an officer of OmniX; her obligations ... to repay the KNF loan arise from commitments made outside her capacity as CEO of OmniX.

Section 145(a) permits indemnification of a corporate agent for expenses arising from agency conduct when the agent acted in good faith and reasonably believed the conduct was in, or not opposed to, the corporation’s best interests.

Pasternack v. Northeastern Aviation Corp. · filed 2018-11-09(a)

Because Pasternack has shown that he acted as an agent of Northeastern when appearing for the Drug Test, that he appeared for the Drug Test by reason of the fact of his agency status, and that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Northeastern, he is entitled to mandatory indemnification as provided by Northeastern’s Bylaws.

Section 145(f) permits agreements to indemnify directors for legal expenses beyond the rights provided by the statute’s other provisions.

Choate, Hall & Stewart v. SCA Services, Inc. · filed 1986-07-18(f)

Passing the question of the availability of subsection (a), we agree with the trial judge that subsection (f) was available. This is the “nonexclusion” provision which says that there may be an agreement to indemnify for legal expenses which is not founded in, or limited by, the other provisions of the statute.

Section 145(f) allows a corporation to grant indemnification rights beyond those provided by section 145(a), including by a vote of disinterested directors.

Raychem Corp. v. Federal Insurance · filed 1994-05-04(f)

Under section 145(f) the corporation can grant indemnification rights beyond those provided by section 145(a). The corporation can grant such further indemnification rights under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.

Section 145(f) permits a corporation to grant additional indemnification rights, but those rights must comply with § 145’s substantive limits, including its good-faith requirement.

In Re American Plumbing & Mechanical, Inc. · filed 2005-06-28(f)

Courts agree that a corporation may, under § 145(f), provide indemnification rights beyond that provided by § 145(a) and § 145(b), but those indemnification rights must be consistent with the substantive portions of § 145, such as the requirement of good faith in §§ 145(a) and (b).

Section 145(j) preserves indemnification and advancement rights after a person leaves a covered position unless the original grant of rights provides otherwise.

Marino v. Patriot Rail Company LLC · filed 2016-02-29(j)

Under the Continuation Clause, the only way that a covered person loses coverage after having “ceased to be a director” is if the source of the coverage “otherwise provided when authorized or ratified.”

Section 145(f) permits separate sources of indemnification and advancement rights, so a condition in an indemnification agreement does not necessarily limit rights under the bylaws.

Narayanan v. Sutherland Global Holdings · filed 2016-07-05(f)

As relevant here, Section 145(f) makes clear that the indemnification and advancement rights under the DGCL are not exclusive of any additional indemnification and advancement rights a corporation chooses to provide through a separate instrument.

Section 145(c) gives a person who successfully defends a covered proceeding a mandatory right to indemnification; refusing an earlier offer to advance defense costs does not waive that right.

Fed. Sec. L. Rep. P 93,273 George S. McLean v. International Harvester Company, (Now Known as Navistar International Com · filed 1987-07-16(c)

The right to indemnification under § 145(c) is mandatory and did not vest until McLean was acquitted. McLean never had a right to waive under § 145(c) until he was acquitted of the criminal charges.

Section 145(c) requires a corporation to indemnify an employee for attorney fees and costs after a successful defense of a covered action.

United States v. Paisley · filed 1992-03-23(c)

Under these circumstances, section 145(c) plainly directs that appellees "shall be indemnified" by Boeing and we therefore hold that Delaware law requires Boeing to indemnify appellees for the attorney fees and costs of defending the underlying action.

Section 145(c) provides indemnification when a corporate officer or director successfully defends a personal-liability claim arising from their corporate position.

Witco Corp. v. Beekhuis · filed 1994-10-20(c)

Nonetheless, the Delaware courts and legislature under state law have chosen to provide broad statutory indemnification protection in situations where a corporate officer or director successfully defends against claims of personal liability that arise from or have a nexus to his corporate position.

Under the pre-1997 version of § 145(c), an employee who successfully defends a lawsuit arising from or connected to the employee’s corporate position is entitled to indemnification for defense costs.

Rudebeck v. Paulson · filed 2000-06-27(c)

Section 145(c) provides mandatory indemnification for any person who is a party to a lawsuit “by reason of the fact that he is or was a director, officer, employee, or agent of the corporation,” to the extent the person succeeds on the merits or in defense of any action. ... Paulson is entitled to indemnification from Ford for successfully defending against Rudebeck’s lawsuit.

Section 145(c) requires a corporation to indemnify an employee for reasonable defense expenses when the employee succeeds in an action covered by the section.

United States v. Paisley · filed 1992-03-03(c)

The underlying merits litigation was of a type referred to in subsection (a) of section 145 of the Delaware Code, so that its subsection (c) applies. ... Appellees indisputably were successful on the merits. Under these circumstances, section 145(c) plainly directs that appellees “shall be indemnified” by Boeing and we therefore hold that Delaware law requires Boeing to indemnify appellees for the attorney fees and costs of defending the underlying action.

Section 145(c) requires a Delaware corporation to indemnify directors and officers who successfully defend on the merits an action against them as corporate officers.

American International Specialty Lines Ins. v. Towers Financial Corp. · filed 1996-05-31(c)

Here, in contrast, Towers is a Delaware corporation (Cplt. ¶ 13) and Delaware law requires that a corporation reimburse directors and officers who successfully defend on the merits an action against them as corporate officers.

Section 145(c) requires indemnification when an officer successfully defends claims arising from the officer’s corporate role.

Horne v. Optimiscorp · filed 2017-03-03(c)

I need not parse through the claims in any more detail than this; Horne clearly is entitled to mandatory indemnification for his successful defense of the non-contract claims asserted against him.

Section 145(c) does not require indemnification for defense expenses when a person is convicted of a conspiracy count, even if one alleged objective of the conspiracy was removed.

Merritt-Chapman & Scott Corporation v. Wolfson · filed 1970-02-27(c)

Under Count One, the defendants were charged with conspiracy and they were found guilty of conspiracy. It is difficult to understand how they can claim “success on the merits or otherwise” after they were charged and convicted of Count One of the indictment.

Section 145(c) does not entitle an officer to indemnification when a claim is dismissed without prejudice so that the same charge can be litigated in another pending case.

Galdi v. Berg · filed 1973-06-05(c)

Certainly, a dismissal without prejudice solely because the same charge is being litigated in other presently pending actions does not fall within the underlying purpose of § 145.

Section 145(c) provides mandatory indemnification after a director or officer succeeds on the merits or otherwise, without requiring proof of good faith.

Meyers v. Quiz-Dia LLC · filed 2017-06-06(c)

It therefore encompassed a commitment to provide mandatory indemnification, without a requirement that the officer first prove good faith, when the officer has been successful on the merits or otherwise.

Section 145(c) covers expenses of an expungement action that was part of a corporate officer’s successful criminal defense.

McLean v. International Harvester Company · filed 1990-06-04(c)

Although the district court denied expungement, that expungement action was part and parcel of McLean’s successful criminal defense and was, therefore, subject to indemnification. We reverse the decision of the district court and hold that McLean shall be indemnified by Harvester for his out-of-pocket expenses (and interest) incurred in the expungement action.

Section 145(c) provides indemnification for a director or officer who succeeds on the merits or otherwise without requiring proof that the person acted in the corporation’s best interests.

Holley v. Nipro Diagnostics, Inc. · filed 2014-12-23(c)

But if Holley succeeds, on the merits or otherwise, he will not have to repay the money initially advanced. DGCL § 145(c) does not have a state-of-mind limitation.

Section 145(c) makes indemnification mandatory for successful officers and directors, but not employees.

Tangas v. Int'l House of Pancakes, LLC · filed 2018-02-08(c)

Now, however, the mandatory duty to indemnify applies only to officers and directors.

Section 145(c) treats an officer as successful on a claim when the opposing party waives it, even without a decision on the merits.

Evans v. Avande, Inc. · filed 2021-09-23(c)

Evans won on a technicality, but—though not on the merits—he succeeded “otherwise.”

Section 145(c)(1) requires the court to assess the settlement as a whole when deciding whether a director succeeded on the merits or otherwise; dismissal with prejudice does not establish success when the director makes substantial concessions.

Huret v. MondoBrain, Inc. · filed 2022-04-27(c)(1)

As explained below, I conclude that Huret was not “successful on the merits or otherwise,” and is therefore not entitled to indemnification under Section 145(c) or MondoBrain’s Charter or bylaws.

Section 145(c)(1) requires indemnification when a director or officer succeeds on the merits or otherwise, measured by that person's own outcome.

Kokorich v. Momentus Inc. · filed 2023-05-15(c)(1)

Kokorich has not achieved success on the merits or otherwise, and therefore is not entitled to indemnification under Section 145(c).

Section 145(c) assesses success claim by claim; a person found liable on a claim cannot obtain partial indemnification based on the proportion of damages awarded.

Evans v. Avande, Inc. · filed 2022-06-09(c)

Moreover, Delaware courts evaluate whether a party was successful “on the merits or otherwise” under Section 145(c) on a claim-by-claim basis.

Section 145(f) permits a corporation to make indemnification mandatory in its charter or bylaws.

Gb-sp Holdings LLC v. Walker · filed 2024-11-15(f)

Pursuant to 8 Del. C. § 145(f), a corporation may provide for mandatory indemnification in its corporate charter or by-laws.

Section 145(c) does not treat charges omitted from a superseding indictment as partial success when the defendant is later convicted of all charges tried and the indictments cover the same conduct.

Insys Liquidation Trust v. Kapoor · filed 2024-07-31(c)

As Defendant has presented no authority to support this argument that a superseding indictment constitutes a successful result on prior charges, this Objection is overruled.

Section 145(f) permits additional indemnification rights but does not let a corporation bypass subsection (a)’s good faith requirement.

Waltuch v. Conticommodity Services, Inc. And Continental Grain Co. · filed 1996-06-27(f)

But crucially, subsection (f) merely acknowledges that one seeking indemnification may be entitled to “other rights” (of indemnification or otherwise); it does not speak in terms of corporate power, and therefore cannot be read to free a corporation from the “good faith” limit explicitly imposed in subsections (a) and (b).

Section 145 permits corporate indemnification when the person acted in good faith and reasonably believed the conduct was in or not opposed to the corporation’s best interests.

Manley v. AmBase Corp. · filed 2000-12-01

The Court instructed the jury in accordance with the standard set forth in § 145 and defined “good faith” as “a state of mind consisting of honesty and belief [of] purpose or faithfulness to one’s duty or obligation.” Tr. at 775. Based on these instructions, the jury could have found that Manley acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of Am-Base.

Section 145(a) permits indemnification of an unsuccessful director or agent only if the person acted in good faith toward the corporation; intentional and willful wrongdoing precludes that finding.

Equitex, Inc. v. Ungar · filed 2002-07-05(a)

If, however, the director or agent is not successful on the merits, then indemnification is permissive, and the corporation may provide indemnity only if the director or agent acted in good faith and in the best interests of the corporation. ... The intentional and willful nature of defendant’s actions precludes a finding that he acted in good faith.

Section 145(a) permits indemnification when a director or officer acted in good faith, reasonably believed the conduct was in or not opposed to the corporation’s best interests, and had no reasonable cause to believe any criminal conduct was unlawful.

Adelphia Communications Corp. v. Rigas (In Re Adelphia Communications Corp.) · filed 2005-03-24(a)

Under Delaware law, a corporation may indemnify a director or officer if he acted in good faith, in a manner that the director reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that the director’s conduct was unlawful.

Section 145 permits indemnification for a director's or officer's violation of the duty of care, but not for a violation of the duty to act in good faith.

In Re Walt Disney Co. Derivative Litigation · filed 2006-06-08(a), (b)

Thus, under Delaware statutory law a director or officer of a corporation can be indemnified for liability (and litigation expenses) incurred by reason of a violation of the duty of care, but not for a violation of the duty to act in good faith.

Section 145 does not permit indemnification of an officer or director adjudged to have acted in a manner reasonably believed to be opposed to the corporation’s interests.

In Re Oracle Securities Litigation · filed 1993-08-09(b)

Neither Delaware law, 8 Del.C. § 145, nor Oracle's indemnity policy permit indemnification of an officer or director who has been adjudged to have acted in a manner which he reasonably believed to be opposed to Oracle’s interests.

Section 145(a) permits a former officer to seek indemnification after the corporation denies it; when the bylaws promise indemnification to the fullest extent permitted, the corporation bears the burden of proving lack of good faith.

Gregorio v. Excelergy Corp. · filed 2008-07-19(a)

Here, as in Von Feldt, EC’s by-laws provide that EC shall indemnify its former officers “to the fullest extent permitted by Section 145.” Under the ruling of VonFeldt, this language places the burden of proof of lack of good faith on the defendants.

Section 145(a) does not permit indemnification for a crime committed with bad faith intent, and its no-presumption provision does not allow the officer to relitigate intent established by the conviction.

InterMune, Inc. and Roche Holdings, Inc. v. W. Scott Harkonen, M.D. · filed 2023-05-10(a)

Accordingly, a corporate officer who has been convicted of a crime involving bad faith, willful misconduct, or a similar mens rea, is precluded from relitigating “good faith” under Section 145(a).

Sections 145(a) and (e) permit corporations to provide indemnification and advancement but do not require them to do so.

Gilbert v. Unisys Corporation · filed 2024-08-13(a), (e)

Sections 145(a) and (e) of the DGCL are enabling provisions.

Section 145(e) requires a director or officer seeking advancement to undertake to repay the funds if ultimately found ineligible for indemnification.

Wong v. USES Holding Corp. · filed 2016-02-26(e)

Until Plaintiffs perfected their requests for advancement by providing the undertakings, they had no right to advancement or to fees on fees because USES had no obligation to advance any amount to Plaintiffs.

Section 145(e) permits a corporation to bind itself through bylaws or contract to advance litigation expenses for present or former directors and officers.

Pearson v. Exide Corp. · filed 2001-04-19(e)

In interpreting section 145(e), Delaware courts have consistently found that a corporation may bind itself in advance, through its bylaws or by contract, to advance the costs of litigation incurred by present or former directors or officers. ... In this case, it is clear that Exide, pursuant to section 145(e), has voluntarily provided to corporate officers and directors an entitlement to advancements of litigation costs.

Section 145(e) permits corporations to provide advancement of expenses but does not require them to do so.

Homestore, Inc. v. Tafeen · filed 2005-11-17(e)

No Delaware corporation is required to provide for advancement of expenses.

Section 145 protects advancement rights owed to directors when a corporation tries to withhold payment to pressure them into a settlement.

Barrett v. American Country Holdings, Inc. · filed 2008-06-20

But it is not free to withhold advancement from the Former Directors as some form of pressure strategy to extract assignments, judgments, breaches of contract, and pledges of cooperation from them.

Section 145(e) permits corporations to advance expenses, and a corporation may make advancement mandatory through its charter or bylaws.

Rizk v. Tractmanager · filed 2014-05-30(e)

Although the authority conferred on corporations to advance expenses is permissive under Section 145(e), a corporation may make the right to advancement mandatory through its charter or bylaws.

Section 145 permits advancement for claims connected to corporate service, but not for claims arising solely from post-termination breaches of personal employment obligations.

Lieberman v. Electrolytic Ozone, Inc. · filed 2015-08-31(e)

Although Section 145’s “by reason of the fact” requirement is construed broadly, it does not cover every suit brought against a director, officer, or employee. ... These allegations revolve around Plaintiffs’ personal contractual relationships with EOI and do not exist “by reason of the fact” that Plaintiffs were EOI officers, directors, or employees.

Section 145(e) permits a corporation to advance a former director’s or officer’s defense expenses on terms and conditions the corporation sets.

Blankenship v. Alpha Appalachia Holdings, Inc. · filed 2015-05-28(e)

As to former directors and officers, the default rule in the statute is that “[s]uch expenses (including attorneys’ fees) incurred by former directors and officers . . . may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.”

Section 145 does not provide advancement for a former officer’s separate offensive lawsuit brought to vindicate his reputation.

Patrick Mooney, M.D. v. Echo Therapeutics, Inc. · filed 2015-05-28(e)

Vindicating one‟s reputation may serve important personal objectives, but that does not mean that filing an offensive lawsuit qualifies as ... “defending,” within the meaning of 8 Del. C. § 145, against claims asserted by reason of the fact that one was an officer or director.

Section 145(k) favors prompt resolution of advancement claims in Delaware; absent exceptional circumstances, a prior foreign action generally does not justify a stay. The same policy applies to contractual advancement claims involving LLCs.

Tulum Management USA LLC v. Casten · filed 2015-11-09(k)

To resolve this tension, this Court has held that “in all but the most exceptional circumstances, claims under Section 145(k) for advancement of expenses should not be stayed or dismissed in favor of the prior pending foreign litigation that give[s] rise to them.”36 ... Defendants’ three arguments do not amount to the “exceptional circumstances”48 requisite to justify staying, in favor of a foreign jurisdiction, an advancement claim asserted in Delaware.

Section 145(e) permits a corporation to withhold advancement until the claimant submits the required undertaking.

Wong v. USES Holding Corp. · filed 2016-04-05(e)

Until Plaintiffs submitted their undertakings, USES would have been within its rights under Section 9.1(b) of its Bylaws and Section 145(e) of the DGCL to reject Plaintiffs’ claims for advancement on that ground alone.

Section 145(e) requires a nexus or causal connection between the underlying proceeding and the person’s corporate capacity for advancement.

Nielsen v. EBTH, Inc. · filed 2019-09-30(e)

An advancement claim arises “by reason of the fact” of a person’s corporate status “if there is a nexus or causal connection between any of the underlying proceedings contemplated by Section 145(e) and one’s official corporate capacity.”

Section 145’s “by reason of the fact” standard is satisfied when a causal connection exists between the proceeding and the officer’s corporate capacity.

Marlene Krauss, M.D. v. 180 Life Sciences Corp. · filed 2022-03-07(e)

The “by reason of the fact” language found in the Charter and Bylaw provisions replicates language in Section 145 of the Delaware General Corporation Law. ... The “by reason of the fact” standard is satisfied when “a nexus or causal connection” exists between the underlying proceeding and the official’s “corporate capacity.” ... Even viewing the evidence in the light most favorable to the Company, a causal nexus exists between the SEC’s investigation and Krauss’s former fiduciary roles.

Section 145 does not provide advancement for a post-employment non-compete claim that has no causal connection to the person's corporate duties or use of confidential information learned in that role.

Carr v. Global Payments Inc. · filed 2019-10-31(a)-(b)

Under medCPU, therefore, the claim for breach of contract does not arise “by reason of the fact that” Carr formerly served as Chairman and CEO of Heartland. Because I have found that the statutory language is interchangeable with the standard in § 5.9 of the Merger Agreement, this means that the breach of contract claim does not “arise[] out of or pertain[] to” Carr’s former position.

Section 145(e) requires an undertaking before a corporation pays advancement, but permits advancement of eligible fees incurred before the undertaking was submitted.

Day v. Diligence, Inc. · filed 2020-05-07(e)

This section permits a corporation to pay fees in advance of a final disposition of an action where the eligible party has submitted an undertaking. It provides that the advancement payment itself must await the undertaking. The very nature of an undertaking is to permit advance payment of reimbursable fees, with the purpose of ensuring that the entity has the legal (although not always practical) ability to recoup amounts advanced if they ultimately prove not indemnifiable. Nothing in the language of the statue, or the policy implicit therein, limits advancement to sums incurred post-undertaking, to my mind.

Section 145(j) preserves a former director’s right to advancement unless the bylaws expressly provide otherwise.

Futures Grp., Inc. v. Brosnan · filed 2023-01-19(j)

By its plain language, Section 145(j) creates a default “continuation rule” establishing, absent express language to the contrary in the Bylaws, that a director’s right to advancement for legal expenses to defend a Proceeding “arising out of his or her status as [a director,]” Bylaws, Article VIII, ¶ 1, continues even after his or her status as a director ends.

Section 145(k) treats advancement claims as summary proceedings that must be brought separately from the underlying action.

Dorsey v. Jones · filed 2025-09-08(k)

Actions for advancement are summary proceedings. 8 Del. C. § 145(k). They are separate from the proceedings giving rise to the potential entitlement to advancement. ... If Jones wants the court to determine his entitlement to advancement of legal fees and expenses, he will need to file a separate and appropriate action for it against the appropriate parties. This motion is denied.

Section 145(e) conditions advancement of expenses on the corporation’s receipt of an undertaking.

Gorodetskiy v. Honeywell International Inc. · filed 2026-06-22(e)

Under Section 145(e), if a corporation elects to provide advancement, that advancement is conditioned “upon receipt of an undertaking.”

An advancement and fees-on-fees award under § 145(c) is not mooted by a later dismissal of the underlying claim.

Kolokotrones v. Ninja Metrics, Inc. · filed 2017-12-18(c)

Second, Plaintiff also earned “fees on fees” in connection with his prosecution of his advancement right. The dismissal of the California cross-claim cannot, under any view of the world, moot that claim.

Section 145(e) permits advancement of defense expenses until the proceeding reaches a final, non-appealable disposition.

Trascent Management Consulting, LLC v. Bouri · filed 2018-09-10(e)

Bouri therefore is entitled to advancement until a final, non-appealable order has been entered in this plenary action.

A claim for advancement of litigation expenses under § 145 is subject to an unclean hands defense based on conduct intended to frustrate repayment of the advanced funds.

J. BRENT FINNEGAN, and Others v. VBENX CORPORATION, and Others VBENX CORPORATION, and Others Plaintiffs-In—Counterclaim v. J. BRENT FINNEGAN, and Others Defendants-In-Counterclaim · filed 2019-03-11(e)

The question of whether VBenx must continue to advance litigation expenses to Finnegan is governed by Delaware corporate law, more specifically 8 Del. Code § 145 (§ 145). ... Certainly, if purchasing a home in Florida under these circumstances will support an unclean hands defense, fraudulent transfer of assets—if that is established—after adverse trial court judgments have entered will as well.

Section 145 indemnification claims accrue when the outcome of the underlying matter is certain.

Scharf v. Edgcomb Corp. · filed 2004-12-07

The single, well-defined moment in time when the statute of limitations begins to run on claims for indemnification is when the outcome of the underlying matter is certain.

A claim for mandatory indemnification under § 145(c) is generally premature before final disposition of the underlying action and may be stayed pending a final, non-appealable judgment.

Robert W. Seiden, Esq. v. Kaneko · filed 2017-03-22(c)

Kaneko has moved for summary judgment on his counterclaim for mandatory indemnification pursuant to 8 Del. C. § 145(c). ... This Court has been clear that “[i]t is generally premature to consider indemnification prior to the final disposition of the underlying action.” ... For this reason, the counterclaim for indemnification will be stayed pending a final, non-appealable judgment.

A claim for mandatory indemnification under Section 145(c) is generally premature before final disposition of the underlying action and may be stayed pending a final, non-appealable judgment.

Robert W. Seiden, Esq. v. Kaneko · filed 2017-03-23(c)

Kaneko has moved for summary judgment on his counterclaim for mandatory indemnification pursuant to 8 Del. C. § 145(c). ... This opinion is not a final, non-appealable judgment. ... For this reason, the counterclaim for indemnification will be stayed pending a final, non-appealable judgment.

Section 145(a) permits a corporation to indemnify a fiduciary for expenses and a judgment on a direct loyalty claim if the fiduciary acted in good faith and reasonably believed the decision was not opposed to the corporation’s interests.

New Enterprise Associates 14, L.P. v. Rich · filed 2023-05-02(a)

A corporation thus can indemnify a fiduciary for all expenses, including a judgment, incurred for a direct claim for a loyalty breach, as long as the fiduciary acted in good faith and reasonably believed that the decision was not opposed to the best interests of the corporation.

Section 145 limits indemnification of directors in derivative suits, including in the merger context.

In Re Countrywide Financial Corp. Derivative Litigation · filed 2008-03-28(b), (h)

Any indemnification of directors in derivative suits is limited by the requirements of Delaware law. Del.Code Ann. tit. 8, § 145(b). This remains true in the merger context.

Section 145(k) does not divest federal courts of jurisdiction over advancement claims.

Confederate Motors, Inc. v. Terny · filed 2012-04-19(k)

However, Confederate has cited no cases, and none have been found, that hold that § 145(k) divests a federal court of jurisdiction to hear advancement claims. ... Confederate’s contention that only the courts of Delaware may decide an advancement claim is without merit.

Section 145(k) gives the Court of Chancery exclusive jurisdiction among Delaware courts over advancement actions, but does not prevent courts outside Delaware from hearing them.

Merinoff v. Empire Merchants, LLC · filed 2017-02-02(k)

The DGCL, despite conferring “exclusive jurisdiction” upon the Court of Chancery to hear and determine all actions for advancement, likewise does not require an advancement proceeding to be brought in the Court of Chancery to the exclusion of courts in other jurisdictions.

Section 145(k) gives the Court of Chancery exclusive jurisdiction over indemnification actions brought under corporate bylaws.

Toedtman v. Turnpoint Medical Devices, Inc. · filed 2019-01-23(k)

The Court will note that the parties did not address the applicability or non-applicability of 8 Del. C. § 145(k) in the briefs or at oral argument but the language of § 145(k) is clear. Plaintiff’ s action for indemnification is a matter that may heard and determined solely by the Court of Chancery.

Section 145(d) supplies the procedure for approving director or officer indemnification when the corporation’s bylaws do not provide another procedure.

MacMillan, Inc. v. Federal Insurance · filed 1990-07-06(d)

Macmillan must grant indemnification in accordance with § 145(d) because its own ByLaws do not state a procedure that supplants this provision.

Section 145 permits contribution between co-indemnitors who share an obligation to indemnify a director.

Chamison v. HealthTrust, Inc.-Hosp. Co. · filed 1999-06-30

Therefore, I conclude that a right of contribution among § 145 co-indemnitors exists under Delaware law and ought to be recognized, especially in this instance where one co-indemnitor acted inequitably.

Section 145 requires indemnifiable expenses to be actually and reasonably incurred in connection with a covered proceeding.

Dore v. Sweports Ltd. · filed 2017-01-31

Once a court has found that a proceeding is covered, the court must determine whether the plaintiffs’ expenses were “actually and reasonably incurred” in connection with that proceeding.

Section 145 covers out-of-pocket expenses beyond the court costs recoverable in the Court of Chancery.

Gandhi-Kapoor v. Hone Capital LLC · filed 2023-07-19

The out-of-pocket expenses encompassed by Section 145 are broader than the restricted concept of “costs” in the statute that authorizes the recovery of court costs in the Court of Chancery.

Section 145 requires an indemnitee to have incurred an out-of-pocket loss; a person whose expenses were paid in full by someone else cannot recover in their own right.

Meyers v. Quiz-Dia LLC · filed 2018-03-16(a)-(c)

This is because Section 145 represents “a statutory embodiment of the common ... law of indemnification,” under which the party bringing the claim must have sustained an out-of-pocket loss.

Section 145(a) limits indemnification of attorneys’ fees to reasonable amounts; standard hourly rates may be recovered when their reasonableness is undisputed.

Creel v. Ecolab, Inc. · filed 2018-10-31(a)

Section 145(a) requires that the indemnitee’s attorneys’ fees be reasonable. ... Ecolab does not assert that Creel’s counsel’s standard rates for attorneys’ fees are unreasonable. ... For the foregoing reasons, I grant Creel’s Motion for Summary Judgment as to additional attorneys’ fees at counsel’s standard hourly rates.

Section 145(c)(1) allows a director to recover defense fees incurred by an entity he wholly owns when he indirectly bears those costs.

Jmîchaele Keller v. Steep Hill, Inc. · filed 2023-08-31(c)(1)

This opinion concludes that because Keller wholly owns Delft Blue, he actually incurred the fees at issue for purposes of Section 145.

Section 145 gives a party materially successful in enforcing indemnification or advancement rights fees on fees unless the corporation expressly excludes that right.

Centrella v. Avantor, Inc. · filed 2024-07-01

Taken together, “under Stifel Financial and its progeny, ‘fees on fees’ are an inherent right of the party materially successful in asserting a claim for indemnification or advancement unless the corporation, as it may, chooses to [expressly] deny that right.”

Section 145(c) does not cover the cost of seeking a presidential pardon years after a final conviction as an expense incurred in defense of a separate proceeding.

InterMune, Inc. and Roche Holdings, Inc. v. W. Scott Harkonen, M.D. · filed 2024-08-01(c)

The Pardon, when separated from the criminal wire fraud proceeding, cannot be viewed as “in defense of” a proceeding, even when allegedly pursued to vindicate one’s perceived reputation.

Section 145 uses “expenses” broadly to include attorneys’ fees and out-of-pocket amounts.

Global Capital Partners LLC v. Green Sapphire Holdings, Inc. · filed 2026-06-23

Section 145 of the Delaware General Corporation Law (the “DGCL”) uses “expenses” as a broad concept that includes both attorneys’ fees and amounts paid out of pocket that might be referred to more traditionally and colloquially as expenses.

Section 145(a) covers expenses arising from being made a party to a proceeding because of a corporate role, not obligations under a loan contract.

AlSayer v. omniX Labs, Inc. · filed 2025-01-15(a)

The KNF loan is not an expense Plaintiff has incurred because she was made a party to a proceeding. It is an obligation arising from a contract with the KNF. The indemnification provision does not apply to the KNF loan.

Section 145(g) permits a corporation to insure directors and officers against liability for breach of the duty of loyalty even when the corporation could not indemnify them.

Arch Insurance Company v. Murdock · filed 2018-03-01(g)

Under Delaware law, therefore, a corporation is permitted to purchase insurance against any liability asserted against an officer or director even when the corporation would not be able to otherwise indemnify that person under 8 Del. C. § 145. This would include insurance for a breach of the duty of loyalty—the determination made in the Memorandum Opinion.

Section 145 permits a corporation to buy D&O insurance for liabilities arising from bad-faith conduct even when it cannot indemnify the director or officer for those liabilities.

RSUI Indemnity Co. v. Murdock · filed 2021-03-03(a), (g)

Implicit in this limitation, when read together with Section 145(g)’s authorization to secure insurance against liabilities for which the corporation does not have the power to indemnify, is the corporation’s statutory authority to obtain D&O insurance for liabilities arising from bad-faith conduct.

Section 145(k) gives the Court of Chancery exclusive jurisdiction over actions for advancement of expenses or indemnification.

Beck v. Greim · filed 2020-07-30(k)

As to the appellant’s request for indemnification, the appellant did not timely seek reargument of this Court’s previous denial of that request and, in any event, the Court of Chancery—not the Superior Court—has “exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.”

Section 145(k) does not give the Court of Chancery jurisdiction over a claim for coverage under a director and officer insurance policy merely because the policy was purchased under Section 145(g).

Ernesto Rodriguez and Alan Hall v. Great American Insurance Company · filed 2021-10-20(k)

GAIC argues that this Court has exclusive jurisdiction under 8 Del. C. § 145(k)–(g), while Plaintiffs argue this Court should exercise its clean-up jurisdiction.37 Neither argument is persuasive. ... Neither factual circumstance justifies a departure from the core holding in Massachusetts Mutual.

Section 145 authorizes corporations to indemnify current and former directors and officers; that obligation does not itself give board members a personal interest in litigation.

Tabas v. Mullane · filed 1985-01-10

These facts are insufficient to excuse demand. The Delaware Corporate Law specifically authorizes corporations to indemnify present and former directors and officers. 8 Del.C. § 145. Board members have no personal interest arising from these obligations. The corporation merely has an obligation to pay the legal bills.