Invictus Global Management, LLC v. Invictus Special Situations Master I, L.P.

── Invictus Global Management, LLC v. Invictus Special Situations Master I, L.P. ── Court: Supreme Court of Delaware Date: April 13, 2026 Category: General IN THE SUPREME COURT OF THE STATE OF DELAWARE INVICTUS GLOBAL MANAGEMENT, § LLC, INVICTUS SPECIAL SITUATIONS § No. 283, 2025 I GP, LLC, CINDY CHEN DELANO, and § AMIT PATEL, § Court Below—Court of Chancery § of the State of Delaware Defendants-Counterclaim § Plaintiffs Below, Appellants, § C.A. No. 2023-1099 v. § § INVICTUS SPECIAL SOLUTIONS § MASTER I, L.P., § § Plaintiff-Counterclaim § Defendant Below, Appellee. § Submitted: January 28, 2026 Decided: April 13, 2026 Before SEITZ, Chief Justice; VALIHURA, TRAYNOR, LEGROW, and GRIFFITHS, Justices, constituting the Court en Banc. Upon appeal from the Court of Chancery. REVERSED. Rudolf Koch, Esquire, Robert L. Burns, Esquire, Susan Hannigan Cohen, Esquire, Nicole M. Henry, Esquire, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware, Lars C. Golumbic, Esquire, GROOM LAW GROUP, Washington, District of Columbia for Defendants-Counterclaim Plaintiffs, Appellants Invictus Global Management, LLC, Invictus Special Situations I GP, LLC, and Amit Patel. Todd C. Schiltz, Esquire, Oderah C. Nwaeze, Esquire, Renèe M. Dudek, Esquire, FAEGRE DRINKER BIDDLE & REATH LLP, Wilmington, Delaware, Stephanie L. Gutwein, Esquire (argued), FAEGRE DRINKER BIDDLE & REATH LLP, Indianapolis, Indiana for Defendant-Counterclaim Plaintiff, Appellant Cindy Chen Delano. Ronald N. Brown, III, Esquire, Aaron S. Applebaum, Esquire (argued), DLA PIPER LLP (US), Wilmington, Delaware for Appellee/Plaintiff Invictus Special Situations Master I, L.P. VALIHURA, Justice: INTRODUCTION This case concerns whether advancement of litigation expenses for the defense of state-law claims brought in state court impermissibly relieves former ERISA fund fiduciaries of responsibility or liability in violation of the Employee Retirement Income Security Act of 1974 (“ERISA”).1 Defendants served as fiduciaries of an ERISA fund and received certain rights to indemnification and advancement from the fund under its governing documents. In October 2023, Defendants were removed from their positions as ERISA fiduciaries and in October 2023, the fund brought state-law claims in state court alleging that Defendants breached their state-law fiduciary duties in violation of the fund’s governing documents. Defendants brought a counterclaim seeking an advance of defense costs under the fund’s governing documents. In response, the fund asserted that advancement from fund assets was barred by ERISA. ERISA section 1110 provides that “any provision in an agreement or instrument which purports to relieve a fiduciary from responsibility or liability for any responsibility, obligation, or duty under this part shall be void as against public policy.”2 The Court of Chancery determined that, based on federal case law and United States Department of Labor (“DOL”) guidance, section 1110 renders “void any contractual provision that purports to allow an ERISA-regulated plan to indemnify and 1 29 U.S.C. § 1001 et seq. 2 Id. § 1110. 2 advance funds to an ERISA fiduciary using plan assets.”3 Thus, the court held that even though the former fund fiduciaries were entitled to advancement under Delaware law, the provisions enabling advancement to the former fund fiduciaries from ERISA assets “were invalid at the time they were entered into.”4 The court also stated that a bar on advancement is particularly appropriate where Defendants have not shown an ability to repay advanced sums. On interlocutory appeal, Defendants arg