Buzz Archive:
New Delaware Case Favors Indemnity for Investment Professionals

by Michael Kendall of Goodwin Procter LLP, 12/22/2009

A recent case from the Delaware Chancery Court, Stockman v. Heartland Industrial Partners, L.P. decided important issues relating to the indemnification of private equity and venture capital professionals by their affiliated funds, in connection with their service as directors and officers of the funds' portfolio companies.

The decision was largely in favor of the investment professionals and will likely result in their prevailing on claims to be indemnified by the fund. Like any of the cases involving the critical issue of indemnification, this one both provides new guidance and confirms the importance of carefully applying existing rules of the road when crafting investment partnership agreements.

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