Kyle Robertson v. Cerebral Inc.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE KYLE ROBERTSON, ) ) Plaintiff, ) ) v. ) ) C.A. No. 2026-0429-DH CEREBRAL, INC., a Delaware ) Corporation, ) ) Defendant. ) ) ) ) ) REPORT Report: October 29, 2026 Date Submitted: September 24, 2026 Andrew H. Sauder, Daniel S. Atlas, Matthew R. Conrad, DAILEY LLP; Attorneys for Plaintiff. Jason C. Jowers, Stephen B. Brauerman, Sarah T. Andrade, Abraham C. Schneider, BAYARD, P.A.; Attorneys for Defendant. HUME, IV, M.  The United States Department of Justice sued a company’s former CEO for misconduct during his tenure and at new corporate ventures that followed. The former CEO sought advancement from the company to pay for his entire defense. The company paid initially. As the United States amended its complaints and narrowed its focus to conduct at other entities, the company objected to footing the whole bill. This litigation ensued. For the reasons below, I find the former CEO’s conduct to be roughly apportionable across the entities and grant only a portion of the advancement requested. I. BACKGROUND1 A. The Parties Plaintiff Kyle Robertson was one of Defendant Cerebral, Inc.’s co-founders and served as its CEO.2 Cerebral is a Delaware corporation that provides a range of telehealth services but focuses primarily on mental health treatment and medication.3 1 I draw the following facts from the pleadings and other documents of record. Unless otherwise noted, pleadings and their associated declarations and exhibits are cited by reference to items docketed in C.A. No. 2026-0429-DH. Citations are to: Plaintiff’s Verified Complaint for Advancement (“Compl.”), Docket Item (“D.I.”) 1; Jointly Submitted Stipulation and Pretrial Order (“PTO”), D.I. 51; Plaintiff’s Pretrial Opening Brief (“POB”), D.I. 54; Defendant’s Pretrial Opening Brief (“DOB”), D.I. 55; Plaintiff’s Pretrial Answering Brief (“PAB”), D.I. 59; Trial Transcript (“Trial Tr.”), D.I. 71; and Joint Trial Exhibits (“JX”). 2 D.I. 1 ¶¶ 1, 20; PTO ¶ 7. 3 D.I. 1 ¶ 7. 1 As CEO of Cerebral, Robertson reviewed and approved privacy and data-security policies, supervised marketing, and participated in data-breach responses.4 B. The Indemnity Agreement and Bylaws. A February 2019 indemnity agreement (the “Indemnity Agreement”) and Cerebral’s February 2022 Amended and Restated Bylaws (the “Bylaws”) govern Robertson’s indemnification and advancement rights.5 1. The Indemnity Agreement. The Indemnity Agreement defines “proceedings” as: [a]ny threatened, pending, or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, and whether formal or informal in any case, in which Indemnitee was, is or will be involved as a party or otherwise by reason of: (i) the fact that Indemnitee is or was a director or officer of the Company; (ii) the fact that any action taken by Indemnitee or of any action on Indemnitee’s part while acting as director, officer, employee or agent of the Company; or (iii) the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and in any such case described above, whether or not serving in any such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses may be provided under this Agreement.6 Section 6 of the Indemnity Agreement provides: 4 JX 15 ¶¶ 6–7. 5 D.I. 1 ¶ 8; JX 1, 2. 6 JX 1 § 2(c). 2  6. ADVANCEMENT OF EXPENSES. To the extent not prohibited by law, the Company shall advance the expenses incurred by Indemnitee in connection with any proceeding, and such advancement shall be made within twenty (20) days after the receipt by the Company of a statement or statements requesting such advances (which shall include invoices received by Indemnitee in connection with such expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the invoice) and upon request of the Company, an undertaking to repay the advancement of expenses if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. Advances shall be unsecured, interest free and without regard to Indemnitee’s ability to repay the expenses. Advances shall include any and all expenses actually and reasonably incurred by Indemnitee pursuing an action to enforce Indemnitee’s right to indemnification under this Agreement, or otherwise, and this right of advancement, including expenses incurred preparing and forwarding statements to the Company to support the advances claimed. Indemnitee acknowledges that the execution and delivery of this Agreement shall constitute an undertaking providing that Indemnitee shall, to the fullest extent required by law, repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. The right to advances under this Section shall continue until final disposition of any proceeding, including any appeal therein. This Section 6 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 10(b).7 Section 8 of the Indemnity Agreement addresses Cerebral’s assumption of Robertson’s defense: 8. ASSUMPTION OF DEFENSE. In the event the Company shall be requested by Indemnitee to pay the expenses of any proceeding, the 7 Id. § 8. 3  Company, if appropriate, shall be entitled to assume the defense of such proceeding, or to participate to the extent permissible in such proceeding, with counsel reasonably acceptable to Indemnitee. Upon assumption of the defense by the Company and the retention of such counsel by the Company, the Company shall not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same proceeding, provided that Indemnitee shall have the right to employ separate counsel in such proceeding at Indemnitee's sole cost and expense. Notwithstanding the foregoing, if Indemnitee's counsel delivers a written notice to the Company stating that such counsel has reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or the Company shall not, in fact, have employed counsel or otherwise actively pursued the defense of such proceeding within a reasonable time, then in any such event the fees and expenses of Indemnitee's counsel to defend such proceeding shall be subject to the indemnification and advancement of expenses provisions of this Agreement.8 2. The Bylaws. Article XI of the Bylaws governs indemnification and advancement. Section 1(a) provides: (a) Indemnification of Directors, Executive Officers, Employees and Other Directors and Executive Officers. The corporation shall indemnify its directors and executive officers (for the purposes of this Article, “executive officers” shall have the meaning defined in Rule 3b- 7 promulgated under the 1934 Act) to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that the corporation shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the 8 Id. § 7. 4  proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under paragraph (d) of this Section.9 Section 1(c) addresses advancement: The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or executive officer of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding; provided, however, that, if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise.10 C. Robertson’s Departure and the Formation of Zealthy. 9 JX 2 Art. XI § 1(a). 10 Id. at pp. 20–21. 5  In spring 2022, the United States Department of Justice (the “DOJ”) began investigating Robertson.11 Cerebral terminated Robertson in May 2022.12 Several months later, Robertson formed Zealthy, a new telehealth company offering online subscriptions, and incorporated it in Delaware on December 15, 2022. 13 Robertson served as Zealthy’s CEO, and German Echeverry served as Zealthy’s Senior Medical Director.14 Both also held positions at Bruno Health, a Zealthy affiliate that provided telehealth services to Zealthy subscribers.15 Robertson was its CFO, and Echeverry was its President.16 D. The Florida Action and Amendments to the Complaint. The spring 2022 investigation prompted the DOJ to file suit against Cerebral and Robertson in April 2024.17 This suit is still pending in the United States District Court for the Southern District of Florida under Case No. 24-cv-21376-RAR (the 11 PTO ¶ 11. 12 PTO ¶ 6. 13 Id.; JX 15 ¶ 41. 14 D.I. 14 pp. 9–10. 15 JX 15 ¶¶ 205–06. 16 JX 15 ¶¶ 204–05 17 PTO ¶ 14. 6 “Florida Action”). Within days of the filing of the original Complaint, Cerebral filed a notice of settlement.18 The DOJ subsequently amended its Complaint three times.19 1. The Original and First Amended Complaints. The original Complaint asserted six counts against Cerebral and Robertson.20 Counts I through IV alleged violations of Section 5 of the FTC Act (“Section 5”) arising from deceptive privacy practices, deceptive data security practices, unfair privacy and data security practices, and deceptive cancellation practices.21 Count V alleged violations of the Opioid Act, and Count VI alleged violations of the Restore Online Shoppers’ Confidence Act (“ROSCA”).22 The DOJ filed the First Amended Complaint the following month. 23 It retained all six claims and added three more.24 Counts I through IV continued to assert the same Section 5 claims against Cerebral and Robertson.25 A new Count V asserted a Section 5 claim against Robertson and Alex Martelli, Cerebral’s Director of Product and Group Product Manager, for unfair and deceptive marketing and 18 D.I. 14 p. 8. 19 See JX 4, 15, 53. 20 JX 3 ¶¶ 159–85. 21 Id. ¶¶ 159–77. 22 Id. ¶¶ 178–85. 23 PTO ¶ 17. 24 JX 3 ¶¶ 159–85; JX 4 ¶¶ 256–99. 25 JX 3 ¶¶ 159–77; JX 4 ¶¶ 256–99. 7 consumer review practices.26 The original Opioid Act and ROSCA claims became Counts VI and VII, respectively, with Martelli added as a defendant to the Opioid Act claim.27 The DOJ also added two claims against Robertson, Echeverry, Zealthy, and Bruno Health: Count VIII alleged unfair and deceptive practices under Section 5, and Count IX alleged violations of ROSCA.28 2. The Second Amended Complaint and Motion to Dismiss. In May 2025, the DOJ filed the Second Amended Complaint (“SAC”), which asserted no counts against Cerebral and omitted the Opioid Act claim. 29 Counts I through IV retained the original privacy, data security, and cancellation claims, but asserted them against Robertson alone.30 Count V retained the marketing and consumer review claim against Robertson and Martelli, while Count VI retained the original ROSCA claim against Robertson alone.31 The claims previously asserted as Counts VIII and IX became Counts VII and X, respectively, and continued to name Robertson, Echeverry, Zealthy, and Bruno Health.32 The DOJ also added two 26 JX 4 ¶¶ 274–79. 27 JX 3 ¶¶ 178–85; JX 4 ¶¶ 280–87. 28 JX 4 ¶¶ 288–99. 29 JX 15 ¶¶ 318–70; JX 4 ¶¶ 280–82. 30 JX 3 ¶¶ 159–77; JX 15 ¶¶ 318–35. 31 JX 4 ¶¶ 274–79, 283–87; JX 15 ¶¶ 336–46. 32 JX 4 ¶¶ 288–89; JX 15 ¶¶ 347–54, 366–70. 8 claims against Robertson, Zealthy, and Bruno Health; Count VIII alleged unfair and deceptive marketing and consumer review practices under Section 5, and Count IX alleged violations of the FTC’s Rule on the Use of Consumer Reviews and Testimonials.33 Each count incorporates the preceding allegations.34 Counts I through VI address alleged practices at Cerebral, including privacy representations and disclosures, data-security representations and safeguards, cancellation obstacles, fabricated or compensated reviews, and subscription disclosures, consent, and cancellation mechanisms.35 Counts VII through X address alleged practices at Zealthy and Bruno Health.36 These allegations include misleading subscription and service representations, unauthorized charges, cancellation obstacles, privacy and security practices, improper telemedicine practices, fabricated and manipulated reviews, and ROSCA violations.37 Beginning at Section VII, paragraph 201, the SAC shifts from Robertson’s conduct at Cerebral to his subsequent activities at Zealthy. 38 In describing those activities, the DOJ compares Zealthy’s unusually high chargeback rate with 33 JX 15 ¶¶ 355–65. 34 See, e.g., JX 15 ¶¶ 318, 347, 366. 35 Id. ¶¶ 319–46. 36 Id. ¶¶ 348–70. 37 Id. ¶¶ 348–52, 356–65, 367–70. 38 Id. ¶¶ 200–05. 9 Cerebral’s rate while Robertson served as CEO.39 It also compares Robertson’s alleged direction of fabricated reviews and suppression of authentic negative reviews at Zealthy and Bruno Health with his alleged conduct at Cerebral.40 The DOJ further relies on Robertson’s experience and the legal guidance he received at Cerebral to allege his knowledge of ROSCA’s requirements.41 As to the Cerebral review practices, the DOJ alleges that a December 2023 announcement of a settlement with Cerebral and the filing of the First Amended Complaint put Robertson on Notice that the challenged practices were unlawful.42 Robertson moved to dismiss Counts I through V of the SAC on the ground that the DOJ had failed to allege ongoing or impending violations warranting prospective injunctive relief because the challenged Cerebral conduct had occurred more than three years earlier.43 The DOJ opposed dismissal, arguing that Robertson’s ongoing Zealthy conduct supported injunctive relief based on his 39 Id. ¶ 266. 40 Id. ¶¶ 279, 298. 41 Id. ¶¶ 248–52. 42 Id. ¶¶ 295, 297. 43 Trial Tr. 28:4–29:7, 29:11–30:6. 10 Cerebral conduct.44 Its opposition included a chart comparing practices at the two companies.45 According to Michael Pineiro, Robertson’s current counsel in the Florida Action, the DOJ’s position required him to defend the Zealthy allegations to defend the Cerebral-related counts.46 He testified that he would have needed to perform this work even without Counts VII through X of the SAC.47 In the same testimony, Pineiro expressly described Counts VII through X as pertaining only to Zealthy.48 3. The Third Amended Complaint. On April 10, 2026, the DOJ filed the Third Amended Complaint (“TAC”), narrowing the action to three counts against Robertson and Zealthy.49 Count I alleged violations of ROSCA; Count II alleged unfair and deceptive practices under Section 5; and Count III alleged violations of the FTC’s Rule on the Use of Consumer Reviews and Testimonials.50 It omitted separate counts for the original privacy, data security, and cancellation claims and for the marketing and consumer 44 Id. 31:3–20. 45 Id. 31:21–32:6. 46 Id. 8:13–24, 34:8–35:14. 47 Id. 36:10–24. 48 Id. 36:14–24 (“If you excise Counts VII to X, which only pertain to Zealthy . . . .”). 49 PTO ¶ 27; JX 53. 50 JX 53 ¶¶ 283–99. 11 review claim against Robertson and Martelli.51 It also removed Martelli, Echeverry, and Bruno Health as defendants.52 The TAC relies on Robertson’s Cerebral-era regulatory involvement and the New York Attorney General investigation to allege knowledge of the applicable legal requirements.53 Count I of the TAC expressly addresses conduct at both Cerebral and Zealthy.54 It alleges Cerebral-related failures to disclose health-data practices, Zealthy-related failures to disclose subscription terms, and cancellation and unauthorized charging practices at both companies.55 Count II’s specific allegations concern only Zealthy’s practices, including cancellation representations, undisclosed charges, medication costs, and allegedly illegitimate telemedicine services.56 Count III alleges violations of the FTC’s Rule on the Use of Consumer Reviews and Testimonials against Robertson and Zealthy.57 The TAC nevertheless 51 JX 15 ¶¶ 318–41; JX 53 ¶¶ 283–99. 52 JX 15 ¶¶ 336–41, 347–70; JX 53 ¶¶ 12–15, 283–99. 53 JX 53 ¶¶ 258–64. 54 Id. ¶¶ 285–88. 55 Id. ¶¶ 285–88. 56 Id. ¶¶ 292–95. 57 Id. ¶¶ 296–99. 12 retains substantial background allegations concerning Cerebral, although it names only Robertson and Zealthy as defendants.58 E. Robertson’s Representation and the Advancement Dispute. 1. Counsel Changes and Initial Advancement Discussions. In connection with the DOJ investigation, Robertson engaged Quinn Emanuel Urquhart & Sullivan LLP to represent him.59 Cerebral began advancing Robertson’s expenses as early as August 2022.60 Quinn Emanuel continued to represent Robertson until February 2025, when Paul Hastings LLP replaced it as counsel. 61 Shortly after the DOJ filed the SAC in May 2025, Marcus, Rashbaum, Pineiro and Meyers LLC (“MRPM”) replaced Paul Hastings.62 Following MRPM’s substitution, Pineiro and Thomas A. Bednar, outside counsel for Cerebral, discussed Cerebral’s advancement obligations concerning Robertson’s representation.63 During this discussion, Bednar requested a budget.64 Pineiro gave a rough estimate of approximately $100,000 per month, but cautioned 58 JX 53 ¶¶ 12–15, 32–98. 59 PTO ¶ 12. 60 Id. ¶ 13. 61 Id. ¶¶ 18–19. 62 Id. ¶ 21. 63 Id. ¶ 22. 64 Trial Tr. 13:21–14:15. 13 that extensive discovery could increase the expense.65 Pineiro assured Bednar that MRPM’s billing would be transparent and reasonable compared to previous counsel’s billing.66 Pineiro testified at trial that he understood Bednar and Cerebral to be concerned that MRPM would bill Cerebral for Zealthy’s defense.67 He reassured Bednar that Zealthy had separate counsel and that MRPM represented only Robertson.68 Pineiro denied agreeing to bill Cerebral-related and Zealthy-related work separately.69 He also testified that he and Bednar did not discuss Zealthy- related work necessary to defend the Cerebral claims.70 Cerebral, however, maintained that Bednar and Pineiro agreed that MRPM would not bill Cerebral for Zealthy-related work.71 2. Discovery Expenses and Unpaid Invoices. 65 Id. 14:6–11. 66 Id. 14:12–15. 67 Id. 14:17–15:5, 15:22–16:4. 68 Id. 15:1–5, 15:22–16:4. 69 Id. 15:17–23. 70 Id. 15:6–16. 71 Id. 227:9–228:12. Cerebral relied on Bednar’s deposition testimony, affidavit, and contemporaneous email to support its understanding. Id. 228:2–12. Because I find the Cerebral-related and Zealthy-related work roughly apportionable independently of any alleged billing agreement, I need not resolve whether Bednar and Pinerio reached such an agreement. 14  Cerebral paid MRPM’s first five invoices in full without requesting separate invoices for Cerebral-related and Zealthy-related work, requesting more detailed entries, or otherwise raising billing issues before payment.72 On November 10, 2025, MRPM submitted separate invoices for its October legal work and third-party discovery services.73 These were the first invoices Cerebral failed to pay.74 Pineiro repeatedly followed up with Cerebral concerning payment.75 On January 13, 2026, he emailed Bednar, explaining that the outstanding balance of $263,326.50 was unsustainable for a boutique firm and could impede MRPM’s ability to defend the case.76 On January 22, Pineiro spoke with Peter Healy of McDermott Will & Emery LLP, who also served as Cerebral’s outside counsel.77 According to Pineiro, Healy said Cerebral needed to raise more capital.78 Pineiro also recalled Healy stating that 72 JX 69; Trial Tr. 46:14–22. 73 JX 30. 74 Trial Tr. 49:8–9, 55:7–10; JX 69. 75 JX 34, 36, 38, 39, 43. 76 JX 39. 77 PTO ¶ 26; Trial Tr. 55:14–20, 69:6–18. 78 Trial Tr. 69:15–24. 15 he was unaware of a dispute over the invoices, although Pineiro was uncertain whether that statement occurred during the January 22 call or an earlier call.79 3. The Advancement Demand and Cerebral’s Response. According to Pineiro, Cerebral had not raised objections concerning invoice form, segregation, or Zealthy-related fees when Robertson made an advancement demand on February 19.80 Cerebral’s response requested separate invoices for Robertson’s Cerebral-era actions and his subsequent actions.81 Pineiro testified that this was the first such request.82 Cerebral also sought separate invoices for vendor costs and legal fees and the exclusion of “ramp-up” time.83 It indicated that it might raise additional questions or audit the invoices.84 F. Procedural Posture. Robertson filed this advancement action in March 2026, seeking payment of more than $800,000 in outstanding fees.85 On April 29, Robertson moved for summary judgment.86 I denied Robertson’s motion, finding that expenses associated 79 Id. 70:1–9. 80 Id. 74:9–21; JX 45. 81 Trial Tr. 75:6–13; JX 48. 82 Trial Tr. 75:10–13. 83 Id. 76:20–24, 77:12–21; JX 48. 84 Trial Tr. 77:22–78:4. 85 PTO ¶¶ 1, 24. 86 D.I. 11. 16 with Cerebral and Zealthy were roughly apportionable.87 Robertson then moved for reargument, which I denied on June 18.88 On July 27, Cerebral invoked its contractual assumption-of-defense right and proposed Jason Hernandez of Stearns Weaver to represent Robertson concerning claims asserted against him in his capacity as Cerebral’s former CEO.89 Robertson’s counsel objected by letter dated July 29.90 Robertson moved for a protective order barring Cerebral from deposing him.91 After hearing oral argument on the motion in September, I issued a bench ruling granting the motion.92 I held trial on September 24, after which I took the matter under advisement.93 The parties agree that the Florida Action falls within the definition of a “proceeding” in the Indemnity Agreement94 and that Robertson is entitled to advancement for Counts I through VI of the SAC.95 The remaining dispute concerns 87 D.I. 20. 88 D.I. 23; D.I. 26. 89 Trial Tr. 88:9–22; JX 60. 90 Trial Tr. 89:7–17; JX 61. 91 D.I. 40. 92 D.I. 58. 93 D.I. 67. 94 PTO ¶ 15. 95 JX 62 pp. 7–8. 17 advancement for Counts VII through X of the SAC and Counts I through II of the TAC. II. ANALYSIS A. Robertson is Entitled to Advancement for Counts I through VI of the SAC; He is Not Entitled to Advancement for SAC Counts VII Through X. 1. Work between Cerebral and Zealthy is Roughly Apportionable. When bylaws and contracts provide for mandatory advancement, “the company carries the ultimate burden of proving that advancement is not required.” Krauss v. 180 Life Scis. Corp., 2022 WL 665323, at *4 (Del. Ch. Mar. 7, 2022). I denied Plaintiff’s Motion for Summary Judgment, finding that expenses incurred between Cerebral and Zealthy were likely to be roughly apportionable.96 During trial, I again considered whether expenses were apportionable. The Court’s apportionment test is well-settled: “Would the disputed expenses have been incurred in defense of the covered proceeding even if there was no non-covered proceeding? If the answer is yes, then the disputed expenses are advanceable.” White v. Curo, 2017 WL 1369332, at *10 (Del. Ch. Feb. 21, 2017) (citation modified). The Court should undertake apportionment review only when it can do so “realistically without significant burden to the Court.” Holley v. Nipro Diagnostics, 96 D.I. 22. 18 Inc., 2015 WL 4880418, at *1 (Del. Ch. Aug. 14, 2015). The fact that a portion of the case is subject to advancement does not mean that all expenses in the case must be advanced. Fasciana v. Elec. Data Sys. Corp., 829 A.2d 160, 175 (Del. Ch. 2003) (“[Roven], which involved complex facts, does not hold that a plaintiff seeking advancement is entitled to have all of his expenses advanced if he merely proves that some portion of the case against him is subject to a contractual right of advancement.”). Advancement is subject to a reasonableness requirement. Underbrink v. Warrior Energy Servs. Corp., 2008 WL 2262316, at *16 (Del. Ch. May 30, 2008). A claim is advanceable only if it arises “by reason of the fact that he was a director or officer of Cerebral.” Robertson is entitled to advancement where the DOJ “pursued” him by reason of the fact that he was Cerebral’s director or officer. See Marino v. Patriot Rail Co., 131 A.3d 325, 346 (Del. Ch. 2016) (“The scope of an individual’s advancement rights normally turns on the pleadings in the underlying litigation that trigger the advancement right.”). Under the circumstances and the DOJ’s charges, he is not entitled to advancement for his conduct after he resigned. Id. Pineiro acknowledged that Counts VII through X concerned only Robertson’s conduct at Zealthy, but maintained that defending Counts I through VI required 19 addressing the Zealthy conduct even without Counts VII through X.97 The counts are temporally distinct, and each grouping relates only to Robertson’s acts at that respective company. As analyzed below, I find the advancement roughly apportionable between Cerebral and Zealthy conduct. 2. The DOJ’s Complaint Does Not Transform Zealthy Conduct Into Cerebral-based Conduct. The Indemnity Agreement and Cerebral’s Bylaws provide Robertson with indemnification and advancement rights in proceedings arising “by reason of the fact” that he was a director or officer of Cerebral.98 The parties do not dispute that the Florida Action is a “proceeding.”99 Cerebral agrees that Robertson is entitled to advancement for Counts I through VI of the SAC, but contends that Counts VII through X are non-advanceable because they concern his conduct at Zealthy and elsewhere.100 97 Trial Tr. 36:14–18 (“If you excise Counts VII to X, which only pertain to Zealthy, based on the background allegations which are incorporated by reference and used to support all of the other claims, I would have had to [do work relating to Robertson’s time as Zealthy].”); Pl.’s Notice of Lodging of Dep. Tr., Ex. 3 at 42:10–15, D.I. 64 (“Separate from that, counts seven to 12 also were also brought against Mr. Robertson and Zealthy. And those were different causes of action that pertained solely to things that have occurred at Zealthy. But you can see the claims are sort of intertwined based on the way the government pled it.”). 98 JX 1 §§ 1(c), 6; JX 2 Art. XI § 1(a), 1(c). 99 PTO ¶ 15. 100 DOB at p. 32. 20  The Court reviews requests for indemnification and advancement on a claim- by-claim basis. Paolino v. Mace Sec. Int’l, Inc., 985 A.2d 392, 400 (Del. Ch. 2009). “[I]f there is a nexus or causal connection between any of the underlying proceedings . . . and one's official capacity, those proceedings are ‘by reason of the fact’ that one was a corporate officer, without regard to one's motivation for engaging in that conduct.” Homestore v. Taffeen, 888 A.2d 205, 214 (Del. 2005). A nexus or causal connection “is established if the corporate powers were used or necessary for the commission of the alleged misconduct.” Bernstein v. TractManager, Inc., 953 A.2d 1003, 1011 (Del. Ch. 2007). That said, “the conduct complained of must occur at a time when one is a corporate officer or director.” Id. To put it succinctly, claims for advancement “can be parsed ‘where a bright-line, temporal standard’ can be applied to demarcate advanceable claims from non-advanceable claims.” Ahmed v. JPMorgan Chase & Co., 2026 WL 251542, at *9 (Del. Ch. Jan. 21, 2026) (quoting Mooney v. Echo Therapeutics, 2015 WL 3413272, at *7 (Del. Ch. May 28, 2015)). A bright-line, temporal standard exists here. When the DOJ filed the SAC, both Cerebral and Robertson were parties.101 The Complaint began with Robertson’s Cerebral conduct and pivoted to his post-Cerebral activity beginning at 101 JX 15. 21 Section VII and paragraph 201.102 The Counts reflect a similar shift. Counts I through IV are against Robertson individually and relate to his conduct at Cerebral.103 Count V involves Robertson’s conduct, along with another co- defendant, Martelli, while at Cerebral.104 Count VI involves only Robertson during his time at Cerebral.105 Again, to the extent that Counts I through VI are by reason of the fact of Robertson’s role as an officer or director at Cerebral, the parties are aligned that Robertson is entitled to advancement. The remaining counts involve Robertson’s conduct after he left Cerebral. Count VII is against Robertson and co-defendants Echeverry, Zealthy, and Bruno Health.106 Count VII does not mention Cerebral.107 Count VIII is against Robertson, Zealthy, and Bruno Health.108 Again, there is no mention of Cerebral in Count VIII’s language.109 Count IX is against Robertson, Zealthy, and Bruno Health.110 102 See JX 15 ¶ 201. 103 Id. ¶¶ 318–35. 104 Id. ¶¶ 336–41. 105 Id. ¶¶ 342–46. 106 JX 15 ¶¶ 347–54. 107 See Id. 108 Id. ¶¶ 355–62. 109 See Id. 110 Id. ¶¶ 363–65. 22 As with the others, Count IX does not reference Cerebral.111 Finally, Count X is against Robertson, Echeverry, Zealthy, and Bruno Health, likewise making no reference to Cerebral.112 But the analysis does not turn solely on whether Counts VII through X mention Cerebral. The DOJ’s narrative complaint references Robertson’s conduct at Cerebral at various points in DOJ’s discussion of his post-Cerebral conduct. For instance, the DOJ recites: Just as Cerebral’s chargeback rate was often high while Robertson was its CEO, Zealthy’s chargeback rate has been unusually high. Its rate has been so high that at least one payment processor threatened to stop allowing its members to use its payment cards to pay Zealthy’s charges.113 In alleging that Robertson, Zealthy, and Bruno Health violated the FTC’s Rule on the Use of Consumer Reviews and Testimonials, the DOJ stated: Just as he did at Cerebral, where he informed his employees that he was ‘fine with fake ones [reviews],’ Robertson has led a practice of impersonating Zealthy subscribers and Bruno Health patients by fabricating online reviews purportedly written by them—but in fact written by Zealthy’s own employees and Robertson himself.114 111 See Id. 112 Id. ¶¶ 366–70. 113 Id. ¶ 266. 114 Id. ¶ 279. 23 Within this area, the DOJ also noted a settlement with Cerebral based on Robertson’s conduct while there: Robertson knew that posting fake reviews, suppressing authentic reviews, upvoting positive reviews, and downvoting negative reviews was illegal no later than December 28, 2023, when the New York Attorney General announced a settlement with Cerebral relating to, among other misconduct, fake reviews that Robertson directed while its CEO (as alleged above).115 The Complaint also references Robertson’s and Cerebral’s charged conduct from the DOJ’s First Amended Complaint: “Robertson has also been on notice since May 31, 2024 that these unlawful and unethical practices have been at issue in this action, because the First Amended Complaint directly implicates analogous practices directed by Robertson when he was CEO of Cerebral.”116 Robertson argues that references like these were sufficient to meet the advancement provisions of the Bylaws and Indemnity Agreement because they relate to his conduct at Cerebral, even for the conduct relating solely to his position at Zealthy. Robertson’s corporate powers at Cerebral “were [not] used or necessary for the commission of the alleged misconduct” at Zealthy. Bernstein, 953 A.2d at 1011. Nor were his corporate powers at Zealthy used or necessary to commit the misdeeds at Cerebral. Robertson’s roles at Cerebral and at Zealthy were temporally distinct. 115 Id. ¶ 295. 116 Id. ¶ 297. 24 Pineiro admitted that Counts VII through X pertain solely to Zealthy.117 There was no overlap between the positions. Robertson suggests that the “DOJ’s arguments in the Florida Action . . . broadly tied together Cerebral and Zealthy related conduct.”118 In support, he cites this Court’s holding that a nexus or causal connection “can include post-separation conduct if it is rooted in pre-separation responsibilities.” Barr v. Genesis CMG Hldgs., LLC, 2025 WL 3720720, at *5 (Del. Ch. Dec. 23, 2025). The mention of Cerebral as background is insufficient to justify advancement when the groups of charges each relate to Robertson’s conduct by reason of the fact that he was a director or officer at Cerebral and Zealthy, respectively. Our Courts look to the pleadings in the underlying litigation to determine whether a causal connection exists. Charney v. Am. Apparel, Inc., 2015 WL 5313769, at *16 (Del. Ch. Sept. 11, 2015). “Nexus is established if the corporate powers were used or necessary for the commission of the alleged misconduct.” Rose v. Berkeley Compute, Inc., 2026 WL 700385, at *5 (Del. Ch. Mar. 5, 2026) (citation modified). I must determine whether there is a nexus or causal connection between the DOJ’s charges against Robertson in Counts VII through X and his corporate capacity at 117 Trial Tr. 36:14–18. 118 POB at p 29. 25 Cerebral. See Brown v. LiveOps, Inc., 903 A.2d 324, 328 (Del. Ch. 2006). “The Court must look to the substance of the claim, as opposed to the words a plaintiff has chosen to use in the pleading.” Rose, 2026 WL 700385, at *5. The corporate powers used in Counts VII through X took place in Robertson’s post-Cerebral role. They relate to his time and conduct at Zealthy. The DOJ’s SAC mentions Cerebral conduct in the context of Zealthy conduct but Counts VII through X solely concerned Robertson’s post-Cerebral activity and arose by reason of his role at Zealthy. Robertson did not use or need his Cerebral powers to commit the alleged misconduct in these latter counts. The DOJ’s background references do not transform Counts VII through X into Cerebral-related