Securities Regulation Daily Wrap Up, CORPORATE GOVERNANCE—Del. Ch.: Black Lives Matter entity must advance litigation costs to former director, (Jul 15, 2026)

By Mark S. Nelson, J.D.

Complex facts raised questions about the scope of DOJ subpoenas and the precise capacity in which an officer/director, who also was a consultant, acted.

Shalomyah Bowers, an officer, director, agent, and consultant for Black Lives Matter Global Network Foundation, Inc. (BLM-GNF), a Delaware corporation, sued the corporation for advancement of litigation costs related to a Department of Justice (DOJ) investigation of alleged wrongdoing at the corporation. A magistrate found that Bowers was entitled to advancement under the corporation’s bylaws and Delaware law. But that conclusion required the analysis of complex facts that raised questions about which of the several roles that Bowers played for the corporation was the precise focus of the DOJ’s investigation, which was made even more challenging to decipher by what the magistrate described as “threadbare subpoenas” that only “permit limited certainty” (Bowers v. Black Lives Matter Global Network Foundation, Inc., No. 2026-0006-DH (Del. Ch. July 13, 2026)).

DOJ subpoenas. BLM-GNF was incorporated in Delaware in 2017 but did not achieve its maximum public support until after the murder of George Floyd in 2020 and the ensuing national protests. Bowers worked for the corporation in various capacities, including performing some unpaid work before 2020 and then, in 2020, as a strategist and as deputy executive director to one of the corporation’s founders. By July 2021, however, Bowers had become a director on the corporation’s board.

Following media reports of alleged wrongdoing at the corporation, the DOJ began an investigation and issued subpoenas focused on whether Bowers made a false statement to a federal agency and committed wire fraud, although a similar subpoena issued to Bowers’s consultancy did not explicitly mention a criminal investigation.

The corporation’s bylaws expressly provided for indemnification of executives “to the fullest extent permitted by the General Corporation Law of the State of Delaware” and for advancement of related costs and fees.

Following the issuance of the DOJ subpoenas, Bowers hired legal counsel and sought advancement from the corporation. The corporation ended its association with Bowers and with Bowers’s consultancy and ultimately denied Bowers’s request for advancement. The corporation cited numerous reasons for the denial, including that the corporation’s bylaws’ nexus test was unmet, Bowers asked for advancement for services rendered before he became a director, the DOJ’s primary focus was Bowers’s consultancy arrangement despite some overlap with other services he provided to the corporation, a theory that the DOJ may have been looking into whether Bowers defrauded the corporation, and the lack of notice under the consultancy contract.

The magistrate received the case on cross-motions for summary judgment which, because of the factual stance of the case, amounted to a stipulation to a final decision.

Nexus. The court ultimately held that Bowers was entitled to the advancement of litigation costs in his capacity as an agent in his individual capacity, although expenses incurred only for his work through his consultancy would not qualify for advancement. The key legal question was whether Bowers’s work as an agent, officer, and director of the corporation had a “causal connection or nexus” with the claimed litigation expenses.

The court began with the proposition that no party disputed that Bowers was at one time a director of the corporation. Instead, the arguments about whether he should receive advancement focused on nuances about the capacity in which the DOJ was investigating Bowers. Bowers argued for a broad interpretation, while the corporation sought to narrow the scope in order to take Bowers’s alleged conduct out of the realm of advancement under the corporation’s bylaws.

According to the court, the corporation’s bylaws required advancement under the circumstances. The DOJ investigation of Bowers, said the court, also was a covered proceeding (Bowers was an officer and director of the corporation). While the court observed that the DOJ’s subpoenas may be vague, they nevertheless suggested a wide-ranging investigation of Bowers that could include his roles as officer and director. Moreover, Bowers’s consulting contract did not supersede the corporation’s bylaws regarding advancement.

As a result, the court concluded that: “Bowers has prevailed in obtaining entitlement to advancement, both in his capacity as director and officer and as agent. Accordingly, Bowers is entitled to a full award of fees and expenses incurred in bringing this action.”

The court also suggested at several points in its opinion that the corporation may, at the indemnification stage of the case, seek recoupment if the facts produce a result different from that implied at the summary judgment stage of the case.

The case is No. 2026-0006-DH.

Judge: Hume, D.

Attorneys: Rebecca L. Butcher (Landis Rath & Cobb LLP) for Shalomyah Bowers. Oderah C. Nwaeze (Faegre Drinker Biddle & Reath LLP) for Black Lives Matter Global Network Foundation, Inc.

Companies: Black Lives Matter Global Network Foundation, Inc.

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