Arif Ahmed v. JPMorgan Chase & Co. and J.P. Morgan Securities LLC

Summary

The Delaware Court of Chancery resolves Defendants’ exceptions to a magistrate’s report concerning Plaintiff’s entitlement to advancement of legal fees. The court adopts the report, rejects a proposed 9% transaction-based allocation cutoff in favor of the Fitracks framework, overrules the exceptions, and remands for further proceedings.

Holdings

1. The Magistrate did not err in rejecting Defendants' proposed 9% transaction-based cutoff. Allocation of advancement fees is properly addressed through the Fitracks framework, under which Plaintiff's counsel certifies in good faith which work relates to matters covered by advancement.
2. Insufficient evidence concerning the Investigations affected the allocation of fees, not Plaintiff's entitlement to some advancement. The Magistrate properly ordered the parties to confer on a Fitracks framework for allocating fees incurred in connection with the Investigations.

Questions Presented

1. Whether the Magistrate erred by rejecting Defendants' proposed 9% transaction-based cutoff and applying the traditional approach to allocation of advancement fees.
2. Whether the Magistrate improperly treated the Investigations as lacking evidence supporting entitlement to advancement rather than as matters for which the available evidence was insufficient to allocate fees.

Disposition

remanded