Plaintiffs bringing claims for advancement under Section 145 of the Delaware General Corporation Law have traditionally benefited from a judicial preference for having such claims resolved by Delaware courts. Section 145(k) provides that the Delaware Court of Chancery has exclusive jurisdiction to hear advancement and indemnification claims arising under Delaware law or the bylaws or agreements of Delaware corporations, and that litigants have a right to summary determination of the question of whether advancement is required.

A recent Court of Chancery decision, In re Tulum Management USA LLC v. Casten, C.A. No. 11321-VCN, reinforces that Delaware courts will draw exceptions even to established rules of judicial comity in order to protect litigants’ rights under Section 145 to have such advancement claims resolved by Delaware courts first. The preference for adjudicating advancement claims in Delaware may govern even where a related first-filed action in another forum might otherwise justify a stay of the Delaware action under the standard articulated in McWane Cast Iron Pipe v. McDowell-Wellman Engineering, 263 A.2d 281 (Del. 1970). In Tulum, the court held that where such an advancement claim is at issue in a later-filed Delaware action, McWane‘s comity-based analysis—favoring a stay of Delaware actions where there exists a pending first-filed action involving the same parties and issues in another court capable of doing prompt and complete justice—does not control. In Tulum, the court instead applied a presumption in favor of allowing Delaware advancement claims to proceed in the Chancery Court absent “exceptional circumstances” justifying a stay, a much higher standard.

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