The criminal and civil litigation of the post-Enron era have raised tough questions over who should pay the often multimillion-dollar defense costs of current and former corporate executives charged with fraud and other wrongdoing. To recruit and to retain executives, most companies promise (typically, through corporate bylaws) to advance attorney fees and litigation expenses to company executives who face criminal or civil litigation and to indemnify such executives.

But is there a point at which a company does not have, or should not have, an obligation to advance defense attorney fees to admitted or proven wrongdoers? And, is there a point at which the amount of defense costs becomes unreasonably excessive?

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