May 11, 2022
Your client is a director or officer of a company and is sued by either a third party or the company itself. How do you fund the client’s defense?
Many companies agree in their organizational documents to indemnify their directors and officers against claims brought against them by reason of their status as directors and officers, including, in many cases, claims brought by the company itself. And these organizational documents often also include a right to advancement—meaning that the company has to pay the director or officer’s legal fees on an ongoing basis, before the end of the case. This is a powerful tool in suits brought by the company against a director or officer, and is critical to a client’s ability to engage competent counsel to defend the lawsuit.
In the second of this three-part series, Schlam Stone & Dolan co-Managing Partner Jeffrey M. Eilender explains how to secure advances for a client and how to use the right of advancement strategically in disputes between a director or officer of a company and the company itself.