In a significant ruling, the Court of Chancery of Delaware has decided in favor of Michael Har-Noy, allowing him to advance his legal fees in a dispute with Mirror Biologics, Inc. This ruling affects Har-Noy, who is the founder and a former director of the company, as well as the ongoing legal matters surrounding Mirror Biologics and its Israeli subsidiary.
The case, titled Michael Har-Noy v. Mirror Biologics, Inc., was filed under docket number C.A. No. 2026-0305-DG on August 11, 2026. The court's decision highlights the rights of corporate directors to receive financial support for legal expenses incurred while defending against allegations related to their corporate roles.
Background
Michael Har-Noy is the plaintiff in this case and has held significant positions within Mirror Biologics, Inc., including founder and former director. He also claims to be the sole director and officer of Mirror Biologics, Ltd., an Israeli subsidiary of Mirror USA. The dispute arose from a civil lawsuit initiated by Mirror USA against Har-Noy in Israel, alleging that he misused his control over Mirror Israel to harm the company and its shareholders.
Mirror USA accused Har-Noy of exploiting his position to advance his personal interests, which they claim constituted breaches of fiduciary duty. The company sought to remove him from his positions within Mirror Israel, claiming he acted fraudulently to prevent necessary corporate changes. Following these allegations, Har-Noy requested that Mirror USA cover his legal expenses related to the Israeli lawsuit, asserting his right to advancement under the company’s bylaws.
The Ruling
The court ruled in favor of Har-Noy, granting his motion for summary judgment regarding his entitlement to advancement of legal fees. The ruling emphasized that under the bylaws of Mirror USA, Har-Noy has a mandatory right to advancement as he is a covered person due to his role as a director.
The court stated, "Under the plain language of the Bylaws, Har-Noy is a covered person. Har-Noy was appointed to Mirror Israel’s board and as its CEO by virtue of his position in Mirror USA."
Judge Danielle Gibbs presided over the case and noted that the advancement provisions in the bylaws are unambiguous and must be interpreted according to their plain meaning. The court also rejected Mirror USA's arguments against Har-Noy's claim, including that the bylaws were not formally adopted and that he was not a party to the underlying action.
Impact
This ruling sets a precedent regarding the rights of corporate officers and directors to receive advancement for legal fees in Delaware. It clarifies that the internal affairs doctrine applies, meaning that Delaware law governs the relationships between a corporation and its officers, regardless of where the underlying legal disputes occur.
The decision is significant for corporate governance, as it affirms the protections available to directors and officers when facing legal challenges related to their corporate roles. This ruling may influence how companies draft their bylaws and handle advancement requests in the future, ensuring that corporate leaders can defend themselves without the burden of personal legal costs.
What's Next
Following this ruling, Mirror USA has the option to appeal the decision. The court has set a deadline for any exceptions to be filed by August 14, 2026. If no exceptions are raised, the parties must meet to determine the fees and prejudgment interest owed to Har-Noy for successfully prosecuting this advancement action.