Opinion ID: 781612
Heading Depth: 3
Heading Rank: 7

Heading: State Street Bank v. Salovaara, (DE Chancery Ct.): The Delaware Action

Text: 23 In July and August of 1998, Salovaara wrote to Eckert demanding that the Fund reimburse him for his legal expenses in the previously-listed six lawsuits, pursuant to the indemnification clause. In response, South Street filed an action in Delaware Chancery Court seeking a declaration that Salovaara was not entitled to indemnification under the agreement and under Delaware partnership law. 1 State Street Bank moved to intervene on behalf of the ERISA investors in February 1999, seeking to assert that using any of the ERISA funds to reimburse Salovaara would violate the Act. The Delaware court denied the motion to intervene on July 9, 1999. The Delaware plaintiffs then sought to dismiss the complaint without prejudice, because they wished to litigate only the ERISA issue. Salovaara cross-moved to dismiss with prejudice. After Judge Hellerstein's ruling in the instant case, the Delaware court entered a judgment and order that declared that the non-ERISA plaintiffs had a contractual obligation to indemnify Salovaara, but ordered that none of the funds used for any potential indemnification for the six underlying lawsuits could come from any of the Fund's assets.