13.1-700.1 - Court orders for advances, reimbursement or indemnification. - Virginia Statutes

§ 13.1-700.1. Court orders for advances, reimbursement or indemnification.

A. An individual who is made a party to a proceeding because he is a directorof the corporation may apply to a court for an order directing thecorporation to make advances or reimbursement for expenses or to provideindemnification. Such application may be made to the court conducting theproceeding or to another court of competent jurisdiction.

B. The court shall order the corporation to make advances and/orreimbursement for expenses or to provide indemnification if it determinesthat the director is entitled to such advances, reimbursement orindemnification and shall also order the corporation to pay the director'sreasonable expenses incurred to obtain the order.

C. With respect to a proceeding by or in the right of the corporation, thecourt may (i) order indemnification of the director to the extent of hisreasonable expenses if it determines that, considering all the relevantcircumstances, the director is entitled to indemnification even though he wasadjudged liable to the corporation and (ii) also order the corporation to paythe director's reasonable expenses incurred to obtain the order ofindemnification.

D. Neither (i) the failure of the corporation, including its board ofdirectors, its independent legal counsel and its shareholders, to have madean independent determination prior to the commencement of any actionpermitted by this section that the applying director is entitled to receiveadvances and/or reimbursement nor (ii) the determination by the corporation,including its board of directors, its independent legal counsel and itsshareholders, that the applying director is not entitled to receive advancesand/or reimbursement or indemnification shall create a presumption to thateffect or otherwise of itself be a defense to that director's application foradvances for expenses, reimbursement or indemnification.

(1987, cc. 59, 257; 2005, c. 765.)