         IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

    NATHAN BRICK,                             )
                                              )
                 Plaintiff,                   )
                                              )
          v.                                  ) C.A. No. 2020-0254-KSJM
                                              )
    THE RETROFIT SOURCE, LLC,                 )
    TRS HOLDCO, LLC and TRS                   )
    MANAGEMENT, LLC,                          )
                                              )
                 Defendants.                  )

      ORDER RESOLVING CROSS-MOTIONS FOR SUMMARY JUDGMENT
         1.     Plaintiff Nathan Brick served as Chief Operating Officer of Defendant

The Retrofit Source, LLC (“Opco”) from March 25, 2018, through January 28,

2020.1 Brick also served as a member of the Board of Managers of TRS Holdco,

LLC (“Holdco,” and together with Opco, “the Companies”) during that time.2 This

action concerns Brick’s demands for advancement from Holdco.

         2.     Holdco and Opco are both Delaware LLCs.3 Holdco is governed by the

Second Amended and Restated Limited Liability Company Agreement of TRS


1
  C.A. No. 2020-0254-KSJM, Docket (“Dkt.”) 1, Verified Compl. for Advancement
(“Compl.”) ¶ 8; Dkt. 15, Defs.’ Answer to Verified Compl. (“Answer”) ¶ 8.
2
  Compl. ¶ 8; Answer ¶ 8. TRS Management, LLC, is the remaining Defendant. That
entity exists solely to own certain incentive equity interests in Holdco and does not have a
separate role in Holdco’s or Opco’s governance. Dkt. 32, Amended Unsworn Decl. of
Rick Cravey (“Cravey Decl.”) ¶ 6. Brick does not argue that he is entitled to advancement
from TRS Management, LLC, and thus, this decision does not address that issue.
3
    Compl. ¶¶ 4, 5; Answer ¶¶ 4, 5.
Holdco, LLC, dated as of March 29, 2019 (“Holdco LLC Agreement”). 4 Opco is

governed by the LLC Agreement of The Retrofit Source, LLC, dated as of March 23,

2018 (“Opco LLC Agreement”).5 Holdco owns all of the membership interests in

Opco and is the Manager of Opco.6

           3.   Opco imports and sells high-end headlamps and other lighting products

for automobiles.7 Brick began working for Opco’s predecessor as an independent

contractor in August 2007.8 Opco hired Brick as a full-time employee in 2011.9

Brick became COO of Opco in late 2013.10 Kian Capital Partners, LLC (“Kian”)

acquired a majority interest in Opco in March of 2018.11 At that time, Brick entered

into an employment agreement with Opco memorializing his role as COO.12 He was

also appointed to Holdco’s Board of Managers (the “Holdco Board”).13




4
    Cravey Decl. Ex. B.
5
    Cravey Decl. Ex. A.
6
    Id. at 1 (Background Statement); id. § 5.1.
7
 Dkt. 22, Aff. of Nathan Brick in Supp. of Pl.’s Opening Br. in Supp. of His Mot. for
Summ. J. (“Brick Aff.”) ¶ 6.
8
    Id. ¶ 2.
9
    Id. ¶ 4.
10
     Id. ¶ 5.
11
     Id. ¶ 17; Cravey Decl. ¶ 3.
12
     Brick Aff. ¶ 18.
13
     Id.

                                                  2
         4.     As COO of Opco, Brick “was in charge of supply chain management

and order fulfillment for [Opco].”14 According to affidavits submitted by Matthew

Kossof, Opco’s CEO, and Victor Jimenez, Opco’s Vice President of Finance, Brick’s

role included: identifying and engaging Customs brokers; submitting paperwork to

Customs brokers as required by U.S. Customs and Border Protection; and ensuring

that all Customs duties were properly paid to the U.S. government.15 Brick does not

dispute the nature of his role but instead contends that Kossoff was responsible for

developing the Customs policies at issue and that Brick “merely executed upon the

terms Kossoff had set.”16

         5.     Soon after Kian acquired its stake in Opco, the United States Trade

Representative imposed special duties on imports from China, periodically

increasing the dutiable rate between June 15, 2018, and May 10, 2019. 17 Although

Opco imports much of its products from China, Kian observed that Opco’s

profitability was relatively unaffected by these new duties, in contrast to other




14
     Dkt. 30, Unsworn Decl. of Victor Jimenez (“Jimenez Decl.”) ¶ 3.
15
  Dkt. 30, Unsworn Decl. of Matthew Kossoff (“Kossoff Decl.”) ¶¶ 14, 15, 17; Jimenez
Decl. ¶ 3.
16
     Brick Aff. ¶ 7.
17
     Id. ¶ 19; Cravey Decl. ¶ 13.

                                             3
similarly situated companies in Kian’s portfolio.18 Kian directed Jimenez and a

consultant to investigate how Opco accounted for the increased duties.19

           6.    Jimenez discovered that Opco had been running a “double-invoicing

scheme” that had caused it to underpay its Customs duties for years.20 The parties

dispute who is to blame for the scheme, but it is undisputed that Brick played a role

in carrying it out.21 Upon learning of the double-invoicing practices, Kian and Opco

authorized a national law firm “to make a voluntary disclosure to U.S. Customs—

notifying the agency that [Opco] suspected it had underpaid Customs duties and that

the company was undertaking a thorough investigation to determine the amount of

any potential underpayment.”22 The law firm also conducted an audit of Opco’s

customs policies and summarized its findings in a report to U.S. Customs and Border

Protection (“CBP”) on May 4, 2020.23 Brick contends the CBP Proceeding “exposes

employees and officers such as Brick to both civil and criminal liability.” 24


18
     Cravey Decl. ¶ 16.
19
     Id.
20
     Id. ¶ 17.
21
   Brick Aff. ¶ 19 (“The Kian Reps and I continued [Opco’s] adherence to the Retrofit
Customs Policies that [Opco] had adopted throughout 2018 and 2019.”); Jimenez Decl.
¶ 10 (“Mr. Brick said that Chinese suppliers undervalued goods for [Opco] on Customs
invoices to reduce the amount of duties owed. He said that this practice had been going on
for years.”).
22
     Cravey Decl. ¶ 18.
23
     Id. ¶ 20.
24
     Dkt. 22, Pl.’s Opening Br. in Supp. of His Mot. for Summ. J. (“Brief No. 1”) at 3.

                                               4
         7.      At a Holdco Board meeting on December 18, 2019, Cravey accused

Brick of misleading the Holdco Board by failing to disclose Opco’s Customs policies

for Chinese imports.25 In January 2020, the Holdco Board determined to terminate

Brick’s employment with Opco and offered him a separation agreement that

included a release of claims (the “Separation Agreement”).26 In relevant part, the

Separation Agreement provided:

                 During [Brick’s] employment with [Opco], [Opco]
                 provided [Brick] with certain payments in 2019 totaling
                 more than $400,000.00 (the “Earnings Payments”) based
                 on incorrect earnings data. . . . In exchange for [Brick’s]
                 execution of this Release . . . [Opco] agrees not to pursue
                 repayment of the Earnings Payments.27

         8.      Brick did not sign the Separation Agreement because he believed the

release was “lopsided and unacceptable.”28 Instead, Brick resigned all of his

positions with Holdco and Opco on January 28, 2020.29 The Companies accepted

his resignation on January 31, 2020.30

         9.      Brick engaged legal counsel to investigate and represent his interests in

connection with the Earnings Payments claim and the CBP Proceedings. On


25
     Id. ¶ 19; accord Brick Aff. ¶ 22–23.
26
     Cravey Decl. ¶ 22.
27
     Brick Aff. Ex. 3, at 1.
28
     Brick Aff. ¶ 31.
29
     Brick Aff. Ex. 4.
30
     Brick Aff. Ex. 5.

                                              5
March 27, 2020, Brick submitted a letter to the Companies demanding advancement

for his legal fees and expenses.31 In support of his demand for advancement, Brick

submitted to the Companies redacted invoices from several different law firms.32 On

April 2, 2020, the Companies responded through counsel that they did not believe

Brick was entitled to advancement or indemnification and that the Companies were

reserving all rights and defenses with respect to any such claims.33 Two days later,

Brick filed this action for advancement.

          10.    On April 16, 2020, the Holdco Board held a meeting to formally

“consider and act upon the demand for advancement of expenses . . . filed by Nathan

Brick.”34 The Holdco Board passed a resolution stating in relevant part:

                 WHEREAS, Nathan Brick has filed a civil action in the
                 Court of Chancery in the State of Delaware pursuant to
                 which he has made a demand for advancement of
                 expenses . . . in connection with his conduct as the former
                 Chief Operating Officer of Opco; . . .

                 NOW, THEREFORE, BE IT RESOLVED, that the Board
                 hereby exercises its contractual right under the Holdco
                 LLC Agreement to deny advancement and
                 indemnification to Mr. Brick . . . .35




31
     Brick Aff. Ex. 7; Cravey Decl. Ex. D.
32
     Cravey Decl. Ex. D.
33
     Brick Aff. Ex. 8; Cravey Decl. Ex. E.
34
     Cravey Decl. Ex. F, at 1.
35
     Id. at 2.

                                             6
          11.    On April 17, 2020, Brick submitted a second demand for

advancement.36 The Companies responded on April 21, 2020, again indicating their

position that Brick was not entitled to advancement.37 The Companies further stated

that even if Brick were entitled to advancement, the Companies would provide such

advancement “only upon the tender of an undertaking ‘satisfactory’ to [Opco] and

its respective affiliates.”38

          12.    On May 16, 2020, Brick made a third demand for advancement, again

attaching redacted invoices.39 The three demands for advancement indicate that

Brick has incurred $129,925.30 in legal fees and expenses over the course of

approximately four months.40

          13.    The parties cross-moved for summary judgment as to Brick’s

entitlement to advancement. Briefing concluded on July 17, 2020,41 and the Court

held oral argument on July 24, 2020.42



36
     Cravey Decl. Ex. G.
37
     Cravey Decl. Ex. H.
38
     Id. at 1.
39
     Cravey Decl. Ex. I.
40
   See Dkt. 30, Defs.’ Answering Br. in Opp’n to Pl.’s Mot. for Summ. J. & Opening Br.
in Supp. of Defs.’ Cross-Mot. for Summ. J. (“Brief No. 2”), at 22.
41
  Brief No. 1; Brief No. 2; Dkt. 34, Pl.’s Reply to Defs.’ Answering Br. in Opp’n to Pl.’s
Mot. for Summ. J. & Pl.’s Answering Br. to Defs.’ Br. in Supp. of Defs.’ Cross-Mot. for
Summ. J.; Dkt. 39, Defs.’ Reply Br. in Supp. of Defs.’ Cross-Mot. for Summ. J.
42
     Dkt. 47, Oral Arg. of Cross-Mots. for Summ. J.

                                             7
                                   LEGAL ANALYSIS

           14.   Summary judgment “should, when possible, be encouraged for it

should result in a prompt, expeditious and economical ending of lawsuits.”43 Court

of Chancery Rule 56 provides that summary judgment is appropriate when “there is

no genuine issue as to any material fact and . . . the moving party is entitled to a

judgment as a matter of law.”44 Summary judgment is not warranted “if the parties

are in disagreement concerning the factual predicate for the legal principles they

advance.”45 Summary judgment is an appropriate way to resolve advancement

disputes when the relevant question turns on the terms of the instruments granting

advancement rights and the pleadings in the proceedings for which advancement is

sought.46

           15.   On cross-motions for summary judgment, a moving party “concedes

the absence of a factual issue and the truth of the nonmoving party’s allegations only

for purposes of its own motion, and does not waive its right to assert that there are

disputed facts that preclude summary judgment in favor of the other party.”47 At the




43
     Davis v. Univ. of Del., 240 A.2d 583, 584 (Del. 1968).
44
     Ct. Ch. R. 56(c).
45
     Id.
46
  Senior Tour Players 207 Mgmt. Co. LLC v. Golftown 207 Hldg. Co. LLC, 853 A.2d 124,
126–27 (Del. Ch. 2004).
47
     United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997).

                                              8
same time, Rule 56(e) provides that the non-moving party “must set forth specific

facts showing that there is a genuine issue for trial.”48 To invoke this rule, “the

opposing party must submit an affidavit requesting discovery and stating its

scope.”49 Although this Court has “broad discretion” in permitting additional

discovery under Rule 56(f), the onus is on the non-moving party to state “with some

degree of specificity, the additional facts sought by the requested discovery.” 50

         16.    Brick demands advancement under the Holdco LLC Agreement,51

which is governed by Delaware law.52 “The mere existence of the limited liability

company’s powers to indemnify and advance expenses creates no rights in any




48
     Ct. Ch. R. 56(e).
49
   Corkscrew Min. Ventures, Ltd. v. Preferred Real Estate Invs., Inc., 2011 WL 704470,
at *3 (Del. Ch. Feb. 28, 2011) (citing von Opel v. Youbet.com, Inc., 2000 WL 130625, at *1
(Del. Ch. Jan. 26, 2000)).
50
   Ryan v. Lyondell Chem. Co., 2008 WL 2923427, at *22 (Del. Ch. July 29, 2008), rev’d
on other grounds, 970 A.2d 235 (Del. 2009); see also Wimbledon Fund LP v. SV Special
Situations LP, 2011 WL 378827, at *4 (Del. Ch. Feb. 4, 2011) (explaining that “[t]he
purpose of a Rule 56(f) affidavit is to avoid situations where an opposing party receives an
adverse judgment on a summary judgment record due to a lack of adequate time for
discovery but also to require a party who needs discovery to respond to a summary
judgment motion to timely explain what discovery it needs to do so”).
51
  Although the gravamen of Brick’s complaint concerns his entitlement for advancement
under the Holdco LLC Agreement, Brick passingly alleges that he is entitled to
advancement under the Opco LLC Agreement. See Compl. ¶ 17. The relevant provisions
of the Opco LLC Agreement are substantially the same as the advancement provisions of
the Holdco LLC Agreement. For simplicity, this decision runs the analysis under the
Holdco LLC Agreement only.
52
     Holdco LLC Agreement § 12.11.

                                             9
member, manager, or other person to compel the exercise of those powers.”53 Rather,

the stated policy of the Delaware LLC Act is “to give the maximum effect to the

principle of freedom of contract and to the enforceability of limited liability

company agreements.”54 “When interpreting advancement and indemnification

provisions in a limited liability company agreement, a Delaware court will follow

ordinary contract interpretation principles.”55 Therefore, when “the provisions of

the operating agreement are clear and unambiguous, the court must honor the intent

of the parties in interpreting their contract.”56 “When the court has looked beyond

the LLC agreement for guidance in construing its terms . . . the court has been careful

not to embrace analogies to other entities or legal structures too broadly or without

close analysis, because the flexibility inherent in the limited liability company form

complicates the task of fixing such labels or making such comparisons.”57 As then-

Vice Chancellor Montgomery-Reeves has summarized, the LLC Act is “less

paternalistic” than the corporate code in that it “defers completely to the contracting




53
  Robert L. Symonds, Jr. & Matthew J. O’Toole, Symonds & O’Toole on Delaware
Limited Liability Companies § 11.02[C], at 11-12 (2d ed. & Supp. 2019).
54
     6 Del. C. § 18-1101(b).
55
     Grace v. Ashbridge LLC, 2013 WL 6869936, at *4 (Del. Ch. Dec. 31, 2013).
56
     Morgan v. Grace, 2003 WL 22461916, at *2 (Del. Ch. Oct. 29, 2003).
57
   A&J Capital, Inc. v. Law Offices of Krug, 2018 WL 3471562, *4 (Del. Ch. July 18, 2018)
(internal quotation marks and citation omitted).

                                           10
parties to create and to limit rights and obligations with respect to indemnification

and advancement.”58

      A.     Entitlement to Advancement
      17.    Brick’s claim to advancement arises from Section 11.3 of the Holdco

LLC Agreement.        Section 11.3(a) provides a grant of indemnification and

advancement rights to Covered Persons. With bracketed numbers to aid the analysis,

Section 11.3(a) provides:

             To the fullest extent permitted by the [Delaware LLC]
             Act, . . . [Opco] shall indemnify, hold harmless, defend,
             pay and reimburse any [1] Covered Person against any and
             all losses, claims, damages, judgments, fines or liabilities,
             including reasonable legal fees or other expenses incurred
             [2] in investigating or defending against such losses,
             claims, damages, judgments, fines or liabilities, and any
             amounts expended in settlement of any claims
             (collectively, “Indemnified Losses”) to which such
             Covered Person may become subject by reason of:

                   (i)    Any act or omission or alleged act or
             omission performed or omitted to be performed on behalf
             of [Opco], any Member or any direct or indirect
             Subsidiary of the foregoing in connection with the
             business of [Opco];

                    (ii) The fact that such Covered Person is or was
             acting in connection with the business of [Opco] as a
             partner, member, stockholder, controlling Affiliate,
             manager, director, officer, employee or agent of [Opco],
             any Member, or any of their respective controlling
             Affiliates, or that such Covered Person is or was serving

58
  Harrison v. Quivus Sys., LLC, C.A. No. 12084-VCMR, at 11 (Del. Ch. Aug. 5, 2016)
(TRANSCRIPT).

                                          11
                 at the request of [Opco] as a partner, member, manager,
                 director, officer, employee or agent of any Person
                 including [Opco] or any [Opco] Subsidiary;

                 [3] provided, that such Covered Person’s conduct did not
                 constitute Excluded Misconduct. [4] Notwithstanding the
                 foregoing, no indemnification shall be payable hereunder
                 to any Covered Person in respect of any claim, lawsuit or
                 other proceeding in which such Covered Person is a
                 plaintiff, other than an action seeking indemnification
                 under this Section 11.3.59

         18.     Section 11.3(b) of the Holdco LLC Agreement provides advancement

rights to Covered Persons as follows:

                 [Opco] shall promptly reimburse (and/or advance to the
                 extent reasonably required) each [1] Covered Person for
                 reasonably legal or other expenses (as incurred) in
                 connection with [2] investigating, preparing to defend or
                 defending any claim, lawsuit or other proceeding relating
                 to any Indemnified Losses [3] for which such Covered
                 Person is entitled to be indemnified pursuant to this
                 Section 11.3, [4] subject to receipt by [Opco] of an
                 undertaking satisfactory to the Board by or on behalf of
                 such Covered Person to repay such amounts if it shall
                 ultimately be determined that such Covered Person is not
                 entitled to be indemnified by [Opco].60

         19.     Section 11.3(g) of the Holdco Agreement provides that the Holdco

Board retains the “sole discretion” to “limit or deny” indemnification to Covered

Persons who are not members of the Holdco Board:

                 In the case of any Covered Person other than a
                 Representative, it being understood that indemnification

59
     Holdco LLC Agreement § 11.3(a).
60
     Id. § 11.3(b).

                                            12
                of a Representative with respect to claims in its capacity
                as such shall be mandatory to the extent permitted under
                this Agreement, the Board shall have the right, acting in
                its sole discretion, to limit or deny the indemnification
                provided for hereunder with respect to any other Covered
                Person, in whole or in part.61

         20.    The Holdco LLC Agreement defines “Covered Persons” to include

Holdco and Opco officers,62 and “Representative” as person elected to the Holdco

Board.63 Applying these definitions to the above passage, Section 11.3(g) grants the

Holdco Board the sole unfettered discretion to limit indemnification rights to all

Covered Persons except Holdco Board members. Put differently, indemnification

for officers is discretionary and indemnification for Holdco Board members is

mandatory.

                1.     Covered Person
         21.    The first issue raised by the parties is whether Brick is entitled to

advancement as an Opco officer. Brick says he is. Defendants say he is not.

         22.    The premise of Defendants’ argument is that the provision of the

Holdco LLC Agreement that permitted the Holdco Board to deny indemnification to



61
     Id. § 11.3(g) (emphasis added).
62
  “Covered Persons” include “(i) each Member, (ii) each officer, director, shareholder,
partner, member, controlling Affiliate, employee, agent or other representative of each
Member, and each of their controlling Affiliates, and (iii) each Representative, officer,
employee, agent or other representative of [Opco].” Id. § 1.7.
63
  “Representative” means “a representative duly elected to the Board,” where Board is
defined as the Holdco Board. Id.

                                           13
officers allowed the Board to deny advancement to officers as well. Defendants

contend that the Holdco Board exercised its discretion to deny advancement to Brick

as an officer.

           23.    Brick does not dispute Defendants’ premise—that a discretionary

decision to deny him indemnification rights as an officer operates to terminate his

advancement rights as an officer. Instead, Brick argues that Hodlco lacked the

authority to “revoke” his right to advancement, which he describes as “vested” as of

the date of his March 27, 2020 demand.64

           24.    Brick relies on this Court’s decision in Branin v. Stein Roe Investment

Counsel, LLC for support, but that case is distinguishable.65 In Branin, the defendant

LLC amended a mandatory indemnification provision after it learned that the

plaintiff had been sued and would be entitled to indemnification for expenses

incurred in litigating that suit.66       After determining that the purpose of the

amendment was to “add[] an exclusion that sought to preclude [the plaintiff’s]

indemnification claim,”67 this Court held that the original indemnification provision

governed the plaintiff’s indemnification rights because any amendment to the LLC



64
  Brief No. 1 at 53–55 (arguing that Defendants “are bound and confined by the limited
grounds they enumerated in their April 2, 2020 rejection”).
65
     2014 WL 2961084 (Del. Ch. June 30, 2014).
66
     Id. at *3.
67
     Id.

                                             14
agreement “did not . . . modify or eliminate . . . any liability that already existed

under the [a]greement.”68

          25.     In this case, the Holdco Board did not act to amend or modify the

mandatory indemnification rights of Brick under the Holdco LLC Agreement. The

right at issue was not “vested” and “revoked.” Rather, the Holdco Board exercised

discretionary right expressly afforded to it under the plain language of the operative

Holdco LLC Agreement.

          26.     By its April 16, 2020 resolution, the Holdco Board exercised its power

to deny Brick advancement in his capacity as Chief Operating Officer of Opco. This

fact is undisputed. And the Holdco Board’s right to make such a determination is

unambiguous. Thus, Brick is not entitled to advancement in his capacity as an

officer.

                  2.    Covered Capacity
          27.     The next issue is whether the proceedings for which Brick seeks

advancement involve actions he took in a covered capacity—as a Holdco Board

member. Brick says they do. Defendants say that they do not.

          28.     Defendants argue that all of the claims for which Brick seeks

advancement involve actions that he took solely in his capacity as Chief Operations

Officer and not as a Holdco Board member. The parties agree that the Holdco LLC


68
     Id. at *8.

                                             15
Agreement imports the “by reason of the fact” standard “that tracks the language of

Section 145 of the [Delaware General Corporation Law].”69 In the corporate

context, this standard is satisfied when “there is a nexus or causal connection

between any of the underlying proceedings . . . and one’s official corporate

capacity.”70

          29.     Defendants submitted detailed evidence that Brick’s actions giving rise

to his demand for advancement implicate solely his capacity as Chief Operations

Officer. Defendants put forth three affidavits that describe Brick’s responsibilities

as COO of Opco.71 A careful review of those affidavits reflect that Brick was acting

as COO in connection with the relevant conduct. Rather than rebut Defendants’

characterization of his role, Brick appears to concede in briefing that the Earnings

Payments claim “is a claim made by reason of the fact that he was COO”72 and that

any liability arising out of the CBP Proceeding arises “‘by reason of the fact’ he was

COO of [Opco].”73 Brick further concedes in his own affidavit that the conduct at

issue occurred in his capacity as an employee, not as a member of the Holdco




69
  Hyatt v. Al Jazeera Am. Hldgs. II, LLC, 2016 WL 1301743, at *7 (Del. Ch. Mar. 31,
2016).
70
     Homestore, Inc. v. Tafeen, 888 A.2d 204, 214 (Del. 2005).
71
     Cravey Decl. ¶¶ 9, 14, 17; Kossoff Decl. ¶¶ 14, 15, 17; Jimenez Decl. ¶ 3.
72
     Brief No. 1 at 38.
73
     Id. at 14.

                                              16
Board.74 This characterization of his responsibilities is corroborated by his general

narrative that he “merely executed” the policies set up by others to whom he

reported, i.e., Kossoff and the Holdco Board.75

          30.   Brick does not meaningfully argue based on the factual record that his

actions bear the relevant nexus to his position as a Holdco Board member. The

record evidence regarding the double-invoicing scheme shows communications

between Brick and the suppliers made in Brick’s role as an officer and carried out as

part of Brick’s day-to-day management of Opco’s supply chain.76 There is no

evidence that Brick included other Holdco Board members on emails with suppliers

or sought their authority to act.77 Brick’s affidavit does not dispute these issues.

          31.   “After the moving party has supported its motion for summary

judgment, the burden shifts to the non-moving party to provide admissible evidence,

in addition to the pleadings, establishing the existence of a genuine issue of material




74
     Brick Aff. ¶ 34.
75
     Id. ¶ 7.
76
  See Cravey Decl. Ex. C (emails evidencing that day-to-day management of the supply
chain and related duties were delegated to Brick).
77
   See generally Cravey Decl. Ex. J (emails between Brick and Chinese suppliers
evidencing Brick’s execution of invoicing scheme).

                                           17
fact.”78 The non-moving party must “dispute the facts by affidavit or proof of similar

weight.”79

         32.    Brick has failed to dispute material facts by affidavit or proof of similar

weight. Thus, there is no issue of disputed material fact that the proceedings for

which Brick claims advancement are solely by reason of the fact that he was COO

of Opco, which is not a covered capacity.

                                      CONCLUSION

         33.    In sum, Brick’s claims for advancement are solely by reason of the fact

that he was an officer of Opco. The Holdco Board invoked its right to use its sole

discretion to deny Brick advancement in that capacity. Defendants’ cross-motion for

summary judgment is therefore GRANTED. Brick’s cross-motion for summary

judgment is DENIED.



                                            /s/ Kathaleen St. J. McCormick
                                            Vice Chancellor Kathaleen St. J. McCormick
                                            Dated: August 18, 2020




78
 Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial Practice in the
Delaware Court of Chancery § 4.08[c], at 4-35 (2019) (citing In re Gaylord Container
Corp. S’holders Litig., 753 A.2d 462, 473 (Del. Ch. 2000)).
79
     Tanzer v. Int’l Gen. Indus., Inc., 402 A.2d 382, 385 (Del. Ch. 1979).

                                              18
