Delaware court orders Bolt to fund ex-CEO's defense against its own lawsuit
Delaware court ruled Bolt must pay ex-CEO's legal fees, finding his severance deal's indemnity clause covers advancement despite missing the word.Summary
Bolt Financial terminated its CEO in March 2024 and gave him a severance package that included a $1 million salary payment, health benefits, and accelerated stock, while releasing most claims. The agreement's Section 6(c) preserved claims related to rights to indemnification or insurance. When Bolt later sued the former CEO in California for alleged misconduct and sought to recover defense costs, the executive demanded advancement of those fees under the indemnity provision. Bolt refused, arguing the release had eliminated that right. On August 12, 2026, the Delaware Court of Chancery granted summary judgment to the ex-CEO, holding that advancement is related to indemnification rights and therefore fell within the carve-out, even though the word advancement was omitted. The court also awarded fees-on-fees for enforcing the right. The decision is a final report subject to exceptions, highlighting that broad indemnity language can cover advancement obligations, leaving companies to fund defenses in lawsuits they initiate.
(Source：Insurance Business)