Marino v. Patriot Rail Company LLC
Delaware Court of Chancery
131 A.3d 325 (2016)
Marino (plaintiff), former CEO of Patriot (defendant), resigned in 2012 amid ongoing litigation with Sierra Railroad, which won a $50+ million jury verdict against Patriot in 2014 and then sought to add Marino personally as a judgment debtor post-verdict; Marino continued participating in the litigation after resigning, but only because of his controlling interest in Patriot's grandparent company, not because of his former role at Patriot. Marino sought an indemnification advance from Patriot for expenses opposing Sierra's post-judgment motion, relying on Patriot's certificate of incorporation promising indemnification and advancement "to the fullest extent permitted by law"; Patriot argued its indemnification obligation ended when Marino resigned, and both sides moved for summary judgment.
Whether, under Delaware law, a former corporate officer is entitled to advancement or indemnification payments for defense of claims relating to actions the officer took while he or she was an officer, but not actions taken after he or she ceased to be an officer.