Zuckerman Spaeder LLP Achieves Significant Fee Advancement Victory in Blankenship Case
Zuckerman Spaeder LLP achieved a significant victory for its client, Donald Blankenship, former CEO and Chairman of Massey Energy in a suit filed in Delaware Chancery Court against Massey and Alpha Natural Resources, which had acquired Massey Energy, for terminating advancement of his legal fees in defense of a criminal indictment.
On May 28, 2015, Delaware Chancery Court Judge Andre G. Bouchard ruled in favor of Mr. Blankenship, stating that he is “entitled to advancement from Alpha as well as Massey for the legal expenses he has incurred in connection with the criminal proceeding.” Judge Bouchard further commented, “This advancement action involves an all too common scenario: the termination of mandatory advancement to a former director and officer when trial is approaching and is needed most.”
“The Judge’s ruling is significant not only for Mr. Blankenship, but for the white collar defense bar generally,” said Graeme W. Bush, chairman of Zuckerman Spaeder and one of the lead attorneys in the advancement suit. "The court’s ruling limits the extent to which a company can condition its advancement obligations in ways that are not outlined in its charter, and interprets indemnification language commonly contained in merger agreements to provide significant advancement protections to officers and directors of the merged corporation."
The Judge’s favorable ruling, available for download here, also requires Alpha to pay Zuckerman Spaeder’s fees for litigating in Delaware on behalf of Mr. Blankenship, and prohibits the company from retrospectively cutting its fees. It also requires the company to pay Mr. Blankenship’s legal fees for the underlying criminal action.
Zuckerman Spaeder began representing Mr. Blankenship in 2014 when he was indicted by a federal grand jury for criminal charges. The fee advancement lawsuit was led by partners Graeme W. Bush and Andrew N. Goldfarb, while the underlying criminal defense is led by partner William W. Taylor and others in the firm’s Washington DC office.