A Delaware court recently ruled that former executives of Tyson 2.0, Inc. are entitled to have their legal expenses covered in ongoing lawsuits against the company. The case, Chad Bronstein et al. v. Tyson 2.0, Inc., C.A. No. 2026-0715-CDW (BWD), centers around claims made by the plaintiffs, who argue that their legal fees should be advanced as they face litigation stemming from their former roles at the company. This decision could have significant implications for corporate governance and the rights of executives in similar situations.
The plaintiffs in this case are Chad Bronstein, Nicole Cosby, and Adam Wilks. Bronstein served as the Chairman and President of Tyson 2.0 from 2021 until November 2023, while Cosby was the Chief Legal and Licensing Officer during the same period. Wilks held the position of Chief Executive Officer until March 2025. Tyson 2.0 is a Delaware corporation that licenses the names and images of celebrities for use in cannabis and other products. The dispute arose from two lawsuits against Bronstein: the Beer Case and the RICO Case, both filed in the U.S. District Court for the Northern District of Illinois.
The Beer Case involves allegations that Bronstein structured a deal with professional wrestler Hulk Hogan in a way that would personally benefit him, leading to his termination from Tyson 2.0. The RICO Case contains similar allegations regarding Bronstein's actions after leaving the company. Following their departures, Bronstein and Cosby signed separation agreements that included broad releases of claims against the company. In June 2026, the plaintiffs sought advancement of their legal expenses related to these ongoing lawsuits.
The case was assigned to a Magistrate in Chancery, who ruled in favor of the plaintiffs by granting their motion for summary judgment regarding entitlement to advancement. Tyson 2.0 subsequently filed exceptions to this ruling, arguing that the separation agreements released the plaintiffs' claims for advancement. However, the court found that the company failed to prove this point. The court stated, "The Company failed to meet its burden to prove its affirmative defense," and affirmed the Magistrate's conclusions that Bronstein and Cosby are entitled to advancement because the claims in the Beer Case arise "by reason of" their former corporate status.
The court's ruling emphasized that under Delaware law, a party may contractually release an advancement claim, but the language of the releases must clearly indicate this intent. The court noted that the separation agreements were governed by Illinois law, which does not support the company's argument that the releases covered advancement claims. The court also pointed out that the plaintiffs' claims in the Beer Case were closely tied to their corporate roles, thus entitling them to advancement of their legal fees.
This ruling is significant for several reasons. It reinforces the rights of corporate executives to seek advancement of legal expenses when facing litigation related to their corporate roles. It also highlights the importance of clearly defined contractual language in separation agreements, particularly when it comes to the release of claims. The decision may set a precedent for future cases involving advancement rights, especially in the context of separation agreements and corporate governance.
Moving forward, this ruling could impact how companies draft separation agreements and handle advancement claims. It serves as a reminder for corporations to carefully consider the implications of their agreements and the rights of their executives. The ruling may also encourage other executives facing similar situations to pursue advancement of their legal expenses.
As for the possibility of an appeal, the court's ruling on the exceptions was final. However, Tyson 2.0 may choose to explore further legal options, including potential appeals to higher courts. Details regarding any related cases or future developments were not available in the court filing.