Del. Court Affirms Novel Ruling on Advancing of Legal Fees

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By Michael Greene

June 9 — Two former Silicon Valley Innovation Co. LLC officers' claims for advancement of legal fees aren't entitled to priority treatment as administrative expenses of a receivership, the Delaware Supreme Court ruled June 8 ( Andrikopoulos v. Silicon Valley Innovation Co., 2016 BL 183677, Del., No. 490, 6/8/16 ).

The state high court affirmed a July 2015 decision by the Delaware Chancery Court resolving the novel issue of whether officers and directors' advancement requests are administrative expenses or unsecured creditor claims (13 CARE 1741, 8/7/15).

In its 2015 ruling, the chancery court concluded that the ex-officers' claims “should be treated on par with the claims of other unsecured creditors and paid pro rata.”

The supreme court heard argument in the case June 8 and issued its brief order that same day agreeing with the lower court's reasoning.

To contact the reporter on this story: Michael Greene in Washington at mgreene@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

For More Information

The court's order is available at http://src.bna.com/fKA.