Ashby & Geddes Obtains Key Decision Regarding the Law of Advancement

Ashby & Geddes, along with co-counsel Rogers & Hardin LLP, obtained a key victory reinforcing the advancement rights of individuals serving as officials of Delaware alternative entities.  Karl Fillip, a former CEO and Manager of Centerstone Linen Services, LLC (“Centerstone”), brought an action in the Delaware Court of Chancery seeking advancement of expenses he incurred in connection with counterclaims and defenses Centerstone asserted against Mr. Fillip in an underlying lawsuit brought in Georgia.  The Court held that the relevant provision in Centerstone’s operating agreement granted Mr. Fillip a mandatory right to advancement of attorneys’ fees and expenses incurred by reason of his positions in the company, even though the provision did not contain the word “advancement” or a variant thereof.  The Court’s decision can be found here.

In the same action, Ashby & Geddes and Rogers & Hardin LLP also obtained two favorable decisions from a Master in Chancery.  Notwithstanding Centerstone’s serial amendments to its counterclaims in the Georgia action, the Master found that certain of the counterclaims were brought by reason of Mr. Fillip’s status as CEO.  Accordingly, in two final reports, the Master upheld Mr. Fillip’s right to advancement of fees and expenses that were incurred in resisting those claims.  The Master also concluded that Centerstone’s operating agreement mandated advancement of fees and expenses Mr. Fillip incurred in resisting affirmative defenses of Centerstone that were asserted by reason of Mr. Fillip’s status as CEO.  The Master’s reports can be found here and here.

Ashby & Geddes attorneys from the Corporate Litigation and Counseling practice group, Stephen E. Jenkins and Marie M. Degnan, along with Phillip S. McKinney from Rogers & Hardin LLP, represented Karl Fillip in this action.