When are counterclaims prosecuted by a defendant subject to advancement? This question was addressed recently by the Delaware Court of Chancery in Pontone v. Milso Industries, C.A. No. 7615-VCP (Del. Ch. May 29, 2014).
Harry Pontone, a former officer and director of The York Group and its subsidiary, Milso Industries, was a defendant in an action brought by the two companies and their parent company in federal court in Pennsylvania. The Pennsylvania plaintiffs alleged that Pontone, while still employed by York and Milso, participated in a wrongful scheme to induce several of their employees and many of their customers to switch to their main competitor. They alleged that these actions violated Pontone’s employment agreement, which included express noncompete and nonsolicitation covenants, as well as the common law. The Pennsylvania plaintiffs asserted numerous claims against Pontone, including claims for breach of contract, breach of fiduciary duty, tortious interference with contractual relations, unfair competition, and unjust enrichment.
