Macauley Law

Sassano v. CIBC World Markets Corp.

Mr. Macauley and two other Zuckerman Spaeder attorneys commenced an action on behalf of Michael Sassano in the Delaware Court of Chancery under Section 145 of the Delaware General Corporation Law against CIBC World Products Corporation ("CIBC") for the advancement of costs, including attorney's fees, incurred by Sassano in defending against several enforcement proceedings. The CIBC bylaws provided for mandatory advancement of costs to officers with management supervisory functions. Sassano ran his own mutual fund market timing business, but he was not an executive officer of CIBC. Nevertheless, the bylaws addressed nominal officers as well as executive officers, and Sassano argued that he was a nominal officer with management supervisory functions. The Court denied cross motions for summary judgment and, after written discovery and depositions, held a one-day trial. Mr. Macauley cross examined the three CIBC witnesses at trial.

Vice-Chancellor Stephen Lamb held that Sassano was entitled to mandatory advancement of costs under CIBC's bylaws. The Court found that Sassano was a nominal officer of CIBC because he was a CIBC employee who held officer titles of Executive Director and Managing Director. The Court also found that Sassano had management supervisory functions because he made hiring, firing, salary, and discipline decisions with respect to his group of employees. Accordingly, the Court required CIBC to advance costs to Sassano incurred in connection with the enforcement proceedings as well as in connection with prosecution of this action.

Vice-Chancellor's Lamb's written opinion is reported at 948 A.2d 453 (Del. Ch. 2008). Click here for a copy of the opinion.