Pontone v. Milso, C.A. No. 8842-VCP (August 22, 2014) (Parsons, V.C.)
By Jamie Bruce and Mark Hammes
This case involves a claim for advancement of legal fees by plaintiff Scott Pontone (“Pontone”), a director and officer of two Delaware corporations, based on indemnification and expense advancement provisions of the corporations’ bylaws. Faced with both a motion to dismiss for lack of standing and Pontone’s motion for summary judgment, the Court granted in part and denied in part the motion to dismiss, and granted partial summary judgment in Pontone’s favor with respect to advancement of certain legal fees and expenses. The Court also found that Pontone was entitled to advancement as to 75% of his “fees on fees” in prosecuting this action.
Pontone was the Vice President of Old Milso, a New York regional casket manufacturer, when it was acquired by The York Group, Inc. (“York”) in 2005. After the acquisition, Pontone served as a director and Executive Vice President of Both York and the successor entity Milso Industries Corporation (“New Milso”) until 2007. In May 2010, Pontone entered into a consulting arrangement with a competitor, Batesville Casket Company (“Batesville”). In August 2010, York and New Milso instituted an action in a federal court in Pennsylvania (the “Underlying Action”) against Pontone and Batesville alleging that they engaged in a wrongful scheme to induce several employees and many of their most lucrative customers to switch to Batesville. The Underlying Action is still ongoing.