Perconti v. Thornton Oil Corp., 2002 WL 982419, at *3 (Del. Ch. May 3, 2002); see also Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1105 (Del. Ch. 2012) (describing mandatory nature of Section 145(c)). Unlike Sections 145(a) and (b), Section 145(c) does not include the "by reason of the fact that the person is or was a director, officer, employee or agent of the corporation ..." language.

Evans v. Avande, Inc., 2021 WL 4344020, at *4 (Del. Ch. Sept. 23, 2021). Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1108 (Del. Ch. 2012). Here, Harkonen was convicted of wire fraud.

The Delaware General Corporation Law "requires a corporation to indemnify a person who was made a party to a proceeding by reason of his service to the corporation" and is successful in that proceeding, and the statute "prohibits a corporation from indemnifying a corporate official who was not successful in the underlying proceeding and has acted, essentially, in bad faith." Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1094 (Del. Ch. 2012). Between the extremes of success and bad faith, a corporation has discretion to define its indemnification obligations by charter, bylaw, or contract. Id. at 1095. A bedrock principle of Delaware law is that indemnity is designed to insulate corporate employees from unjustified claims: it allows officers to do their jobs while litigation might be pending.

Marino v. Patriot Rail Co., 131 A.3d 325, 333, 339 (Del. Ch. 2016); VonFeldt v. Stifel Fin. Corp., 714 A.2d 79, 81 (Del. 1998) ("Section 145(a) authorizes, but does not require, indemnification in connection with third-party actions."). See Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1105 (Del. Ch. 2012); cf. Tafeen, 888 A.2d at 212 ("The right to indemnification requires 'success on the merits or otherwise' in defending proceedings brought under section 145(a) or (b)."

In analyzing success on the merits, I must therefore "examine what [the Plaintiff] was charged with or formally accused of, and [] compare that with the result [the Plaintiff] actually achieved."Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1107 (Del. Ch. 2012). Id.

TABLE OF AUTHORITIES Hermelin v. K-V Pharm. Co., 54 A.3d 1093 (Del. Ch. 2012)

The company relies on Delaware decisions construing that state's corporate indemnification statute, 8 DEL. CODE § 145, for the proposition that a jury's finding of fraud negates good faith as a matter of public policy. SeeHermelin v. K–V Pharm. Co. , 54 A.3d 1093, 1112 (Del. Ch. 2012) ; Sun–Times Media Grp. v. Black , 954 A.2d 380, 404 n.93 (Del. Ch. 2008).

Evans v. Avande, Inc., 2021 WL 4344020, at *4 (Del. Ch. Sept. 23, 2021) (citing Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1107 (Del. Ch. 2012)). See, e.g., Huret v. MondoBrain, Inc., 2022 WL 1232582 (Del. Ch. Apr. 27, 2022).

When determining success on the merits, courts should not look behind the result. Hermelin v. K-V Pharmaceutical Co., 54 A.3d 1093, 1107 (Del. Ch. 2012). "Rather, where the outcome of a proceeding signals that the indemnitee has avoided an adverse result, the indemnitee has succeeded 'on the merits or otherwise'." Id.

(Mem. Op. at 5 (quoting Hermelin v. K-V Pharm. Co., 54 A.3d 1093, 1094 (Del. Ch. 2012) (emphasis in original)). The Bankruptcy Court rejected Defendant's argument that he had “achieved success on the merits or otherwise" on the charges dropped from the First Superseding Indictment and was therefore entitled to at least partial indemnification. (See Mem. Op. at 6-9.)