Invictus Fund Required to Advance Legal Expenses to Ex-Partners

A privately held Invictus fund—Invictus Special Solutions Master I LP—is on the hook for expenses in an ERISA lawsuit against its former general partner, the Delaware Supreme Court ruled Monday, saying the federal law doesn’t prevent investment fund fiduciaries from receiving legal expenses in advance to defend state-law claims.

Justice Karen L. Valihura said in a unanimous opinion that while Invictus Global can receive the advance, fund managers must repay it if it’s ultimately determined they’re not entitled to indemnification. The state’s high court reversed a Court of Chancery ruling that the federal Employee Retirement Investment Security Act did bar ...