Background
Shalomyah Bowers served Black Lives Matter Global Network Foundation (BLM-GNF) in multiple overlapping capacities: as an unpaid employee initially, then as Deputy Executive Director and Strategist starting in 2020, and as director and corporate secretary beginning in 2021. He received all compensation through BOWERS*, his consulting company, which BLM-GNF paid $140,000 monthly (later $130,000 monthly). In September 2025, the U.S. Department of Justice launched an investigation into BLM-GNF, issuing grand jury subpoenas to both Bowers and BOWERS* seeking documents related to internal records, retreats, financial transactions, and communications. The subpoena identified Bowers as “a subject of the Grand Jury’s investigation” into possible false statements on IRS Form 990 and wire fraud. Bowers signed the 2020 Form 990 in his capacity as Board Secretary. That same month, BLM-GNF’s board discharged Bowers and terminated the consulting relationship. When Bowers requested advancement of his legal fees, BLM-GNF denied the request, arguing the DOJ investigation focused on activities predating his director role or on BOWERS* as a separate entity.
BLM-GNF’s bylaws provided for mandatory advancement and indemnification to the “fullest extent permitted” by Delaware law for “each director, officer, employee and agent” incurring expenses “by reason of the fact that they are or were serving” in such capacity. Bowers filed suit seeking a declaration of entitlement to advancement.
The Court’s Holding
The Delaware Court of Chancery held that Bowers satisfied his burden of proving entitlement to advancement under BLM-GNF’s bylaws. The court applied the “nexus or causal connection” test required by Delaware law—whether the litigation expenses bore a sufficient connection to his “official corporate capacity.” The court found multiple points of nexus satisfying this test. First, the DOJ’s investigation into potential embezzlement and wire fraud necessarily implicated Bowers’s director and officer status, because embezzlement as a legal matter requires the property to already be in the embezzler’s lawful possession—a position Bowers held through his corporate authority. Second, Bowers signed the 2020 Form 990 as Board Secretary, and the DOJ explicitly investigated potential false statements on the 2020 and 2021 Forms 990, creating a clear nexus to his officer role. Third, the DOJ subpoenas requested documents regarding donor statements, which Bowers maintained in his capacity as Board Secretary. Fourth, substantial portions of the investigation targeted activities occurring during Bowers’s tenure as director and officer.
The court rejected BLM-GNF’s attempt to parse Bowers’s multiple roles too finely. Delaware law construes the “by reason of the fact” standard “broadly and in favor of indemnification and advancement.” Where ambiguity exists regarding apportionment between covered and non-covered claims, courts defer the question to later proceedings (the “Fitracks process” or ultimate indemnification stage) rather than deny advancement entirely. The court acknowledged that the subpoenas’ language was “laconic” and permitted limited certainty about the government’s precise investigatory aims, but found this uncertainty insufficient to rebut Bowers’s showing of nexus. Notably, BLM-GNF itself conceded in its denial letter that “it is entirely possible that the government’s approach here may be to develop evidence that Mr. Bowers defrauded BLM GNF”—an admission that itself established the requisite nexus.
Key Takeaways
- Delaware courts construe advancement provisions broadly in favor of the indemnitee and require corporations to shoulder the burden of proving advancement is not required when bylaws mandate it to the fullest extent of Delaware law.
- A nexus sufficient to trigger advancement rights exists when corporate authority was necessary for or used in connection with the alleged misconduct, even if the investigation spans multiple corporate roles or capacities.
- Ambiguity regarding apportionment between covered and non-covered portions of an investigation does not defeat entitlement; such scope questions are deferred to later proceedings to avoid excessive litigation over advancement.
- Directors and officers may qualify as “agents” for advancement purposes under bylaws using that language, and advancement rights extend to investigations targeting the agent role if a sufficient nexus to corporate capacity exists.
Why It Matters
This decision reinforces Delaware’s strong policy favoring the advancement of litigation expenses for directors and officers, which serves important corporate governance functions by ensuring that intra-corporate disputes are litigated vigorously without depleting the defendant’s resources. The ruling clarifies that corporations cannot circumvent advancement obligations by emphasizing the investigative focus on conduct in a secondary corporate capacity (here, the consulting company) when the underlying conduct implicated use of primary corporate authority. For nonprofit organizations and foundations, the decision underscores that mandatory advancement bylaws operate identically to those in for-profit corporations.
The case also highlights tensions in nonprofit governance when officers receive substantial compensation through related entities. BLM-GNF had paid BOWERS* over $1.6 million during Bowers’s tenure amid public controversy over the organization’s financial management and donor fund allocation. While the DOJ investigation proceeded and questions about fund management remain open, the court’s ruling ensures that Bowers’s defense against those charges will not be funded by him personally—a result consonant with Delaware policy, but one that may invite scrutiny of whether advancement provisions adequately account for insider-related-party dealings in the nonprofit context.