BRENT BLAKE
v.
AMERICAN SALES AND MANAGEMENT ORGANIZATION, LLC, ETC.
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The court affirmed a lower court decision regarding corporate indemnification rights, citing extensive precedent on when officers qualify for indemnification under Florida and Delaware corporate law. The case turns on whether the requisite nexus exists between the officer's corporate position and the underlying proceedings.
The court affirmed that indemnification is not available when an officer is prosecuted for their own conduct rather than on account of their corporate position, even if the officer had access to resources due to their position. A causal nexus between the corporate capacity and the alleged misconduct is required for indemnification eligibility.
[1] Under Florida corporate law, an officer's eligibility for indemnification requires a causal nexus between the underlying proceedings and the officer's official corporate…
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Join FLexlaw to unlock all legal intelligence“if there is a nexus or causal connection between any of the underlying proceedings . . . and one's official corporate capacity, those proceedings are 'by reason of the fact' that one was a corporate officer, without regard to one's motivation for engaging in that conduct”
Homestore, Inc. v. Tafeen, 888 A.2d 204, 214 (Del. 2005) — establishing the standard for determining when proceedings qualify as 'by reason of' corporate office
An individual, presumably a corporate officer, sought indemnification for proceedings against them. The officer's qualification for indemnification de…
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PER CURIAM.
Affirmed. See Banco Indust. de Venezuela C.A., Miami Agency v. de Saad, 68 So. 3d 895, 900 (Fla. 2011) (observing: “Here, de Saad did not meet the requirements for indemnification. . . because she was not prosecuted ‘by reason of the fact’ that she was a corporate officer. See § 607.0850(1), Fla. Stat. Although de Saad may have had access to the laundered funds due to her position as a corporate officer, she was prosecuted for her conduct, not on account of her position. This conduct was not required by her position as a corporate officer and was, in fact, contrary to corporate policy”); Int’l Ins. Co. v. Johns, 874 F. 2d 1447, 1459 n. 22 (11th Cir. 1989) (observing: “We rely with confidence upon Delaware law to construe Florida corporate law. The Florida courts have relied upon Delaware corporate law to establish their own corporate doctrines.”) (citations omitted); Homestore, Inc. v. Tafeen, 888 A. 2d 204, 214 (Del. 2005) (holding “if there is a nexus or causal connection between any of the underlying proceedings . . . and one's official corporate capacity, those proceedings are ‘by reason of the fact’ that one was a corporate officer, without regard to one's motivation for engaging in that conduct”); Bernstein
v. TractManager, Inc., 953 A. 2d 1003, 1011 (Del. Ch. 2007) (noting Delaware
courts have consistently held that the requisite nexus or causal connection is established “if the corporate powers were used or necessary for the commission of the alleged misconduct”); Cochran v. Stifel Fin. Corp., 2000 WL 1847676 (Del. Ch. Dec.13, 2000) aff’d in part, 809 A. 2d 555 (Del. 2002);
Lieberman v. Electrolytic Ozone, Inc., 2015 WL 5135460 (Del. Ch. Aug. 31, 2015); Weaver v. Zenimax Media, Inc., 2004 WL 243163 (Del. Ch. Jan. 30, 2004).
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Int'l Ins. Co. v. Johns, 874 F.2d 1447 (11th Cir. 1989)
- Banco Indus. de Venezuela C.A. v. de Saad, 68 So. 3d 895 (Fla. 2011)