An executive’s guilty plea in a criminal matter cannot trump an indemnity agreement that granted reimbursement to corporate officers, the Delaware Court of Chancery has ruled.
Vice Chancellor Donald F. Parsons Jr. said the agreement’s language did not require a director to be completely successful in litigation, adding the case could still be dismissed on procedural grounds or the prosecution may drop the case at any point. Parsons’ decision granted indemnification to the chairman of a diabetes monitoring device manufacturer that was acquired by a rival, despite the chairman pleading guilty to insider trading.
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