Citadel Holding Company v. Roven

603 A.2d 818 (Del.1992)

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Nature of the Case

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Facts

Citadel (D) was a savings and loan holding company. Roven (P) was a director of D from 1985-88. During that time P owned beneficially 9.8% of the common stock. In May of 1987, D and P entered into an indemnification agreement. The agreement excluded indemnification for 16(b) violations but had a separate paragraph for advances which did not mention the previous exclusion paragraph for 16(b) violations. D sued P under 16(b) for purchasing certain options to buy D stock while he was a director. P is claiming that the option purchases did not violate 16(b), but nonetheless he was entitled to an advancement to cover litigation expenses. The trial court held for P with respect to advances on a partial summary judgment. The Court ruled that P was entitled to an advancement of $928,148.46 for attorney’s fees and $58,542.88 for related expenses. Although judgment was entered against D for those amounts, the court disallowed prejudgment or post-judgment interest. Both parties appealed.