The Delaware Court of Chancery recently issued a letter opinion granting the defendant, Palladium Industries, Inc., judgment on the pleadings and dismissed the action by the plaintiff, David Miller, for advancement of legal fees and expenses. Miller argued that he was entitled to have his legal fees and expenses advanced to him under Palladium’s bylaws, which required mandatory advancement unless the board of directors specifically determined not to pay a particular advancement request in a timely manner. Here, Miller sought advancement of legal fees when he was sued by VisionAid, Inc. (Palladium’s operating subsidiary) for breach of fiduciary duty as an officer and director of it and Palladium, and for misappropriation, waste and conversion. Approximately four weeks after receiving Miller’s request for advancement of fees, Palladium’s board convened a special meeting and voted to deny the request as it was not in Palladium’s best interest. In granting Palladium’s motion for judgment on the pleadings, the Court reasoned that the board had acted within the parameters of the bylaws, and Miller’s case for advancement had to be dismissed as a matter of law.
Miller v. Palladium Industries, Inc., C.A. No. 7475-VCN (Del. Ch. Dec. 31, 2012) (Noble, V.C.)