A Delaware vice chancellor ruled that American Rail Partners LLC must cover legal expenses incurred by a railroad ownership company that it sued over unjust enrichment claims, saying an agreement in place “unambiguously” provides that expenses be covered.
In a 24-page memorandum opinion, Vice Chancellor Paul A. Fioravanti Jr. said fee advancement provisions of American Rail Partners’ limited liability agreement are “quite broad” and unambiguous.
International Rail Partners LLC, its manager Gary O. Marino, and Boca Equity Partners LP sued American Rail for the advancement of fees earlier this year, asserting that their LLC agreement entitles them to “mandatory advancement and indemnification” related to a suit filed in the First State’s Superior Court in February.
In his ruling, the vice chancellor noted that there is a “strong public policy in favor of indemnification and advancement” in Delaware. That policy aims to assure key corporate officers that they will not have to shoulder the risk of paying legal expenses for claims related to the performance of their duties, the opinion said.
International Rail, Marino, and Boca Equity are represented by Andrew Dupre, Brian Lemon, and Stephanie Dallaire.