The individual defendants, former directors and officers of Old Noranco, brought a motion seeking advancement of legal expenses from the plaintiff (successor to Old Noranco and the purchaser) to defend against claims of misrepresentation in financial statements and a crossclaim by BDO Canada LLP.
The court determined that the claims, despite being framed against them as shareholders, implicated their fiduciary capacities, thus triggering indemnification rights.
The plaintiff failed to establish a "strong prima facie" case of bad faith against one defendant, Kelly Clinton, which would have disentitled him to funding.
The court also ruled that the existence of third-party funding did not preclude the individual defendants from recovering their legal expenses.
The motion for advancement of legal expenses was granted.
