Opinion ID: 2011277
Heading Depth: 1
Heading Rank: 4

Heading: deduction of attorneys' fees and past payments from the amounts due stella

Text: Stella and Demos allege that the Court of Chancery erred when it deducted attorneys' fees and past payments from the amounts due Stella for the repurchase of the Costas Stock. There is nothing in the record which shows that Sunview ever adopted a by-law or resolution providing for indemnification of its officers and directors. Therefore, Stella's claim for indemnification is governed by 8 Del.C. § 145(b) which provides that: (b) A corporation may indemnify any person who was or is a party or is threatened to be made a party to any ... action ... in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director of the corporation... against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in ... the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery ... shall determine upon adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery ... shall deem proper. Pursuant to 8 Del.C. § 145(b), the Court of Chancery has the discretion to determine if, in view of all of the circumstances of the case, the party is fairly and reasonably entitled to indemnity. Stephanis II, slip op. at 7, citing 8 Del.C. § 145(b). This Court must treat the Court of Chancery's findings with substantial deference. Cede & Co. v. Technicolor, Inc., 634 A.2d at 360. The Court of Chancery found that Stella was not fairly and reasonably entitled to indemnity[,] Stephanis II, slip op. at 7, citing 8 Del.C. § 145(b), and it does not appear that the Court of Chancery failed to employ a logical or orderly deductive process in reaching the decision. Stella and Demos argue that the Court of Chancery based its finding solely on the fact that Stella was adjudged to have usurped a corporate opportunity, claiming that the court failed to consider her conduct and, therefore, its determinative process was in error. Demos and Stella ignore the court's discussion of Stella's lack of regard for Sunview's or its other shareholders rights. Stephanis II at 7. In view of all the circumstances, the court reasoned that it would be neither fair nor reasonable to indemnify Stella for impermissible actions taken in callous disregard of Sunview and its stockholders. Demos' and Stella's contention that the Court of Chancery erred in deducting past arcade bonus payments to Stella is also without merit. The court found that the payments were not related to work performed, but were bonus payments resulting from stock ownership. Since Stella would not have received the bonus payments if she had not impermissibly purchased the Costas Stock, she is not entitled to the bonus.