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Delaware court orders Bolt to fund ex-CEO defense in lawsuit
Bolt argued the separation release eliminated his advancement right, but the Delaware Court of Chancery ruled advancement was covered by a carve-out for indemnification or insurance and awarded fees-on-fees.
Bolt Financial must fund its fired former CEO’s legal defense in a dispute tied to the company’s own lawsuit against him, after a Delaware Court of Chancery magistrate found his “advancement” claim fell within a separation carve-out.
Bolt ended the CEO’s employment in March 2024. The May 28, 2024 separation deal included severance and stock-based payments in exchange for dropping most claims, but preserved Section 6(c), which protected “claims related to rights to indemnification or insurance,” a wording that later proved decisive.
After Bolt advanced his defense fees in an earlier investor suit brought by Activant in July 2023, the company later took a different position. In March 2025 Bolt floated claims of alleged misconduct and breaches of fiduciary and confidentiality obligations, and filed in California Superior Court in January 2026, while the former CEO demanded ongoing advancement as defense costs arose, saying the obligation was repayable if he lost.
Bolt refused advancement on March 6, 2026, arguing the release had ended the right. On August 12, 2026, the Delaware Chancery granted summary judgment to the former CEO, finding advancement was “related to rights to indemnification” even though the agreement did not use the word “advancement,” and awarded fees-on-fees for enforcing the right.
The ruling is issued as a Final Report subject to exceptions within three business days, not a final judgment, according to Insurance Business. The decision also noted that the defense-cost rights had not expired because Bolt could still sue him regarding his time as an officer.