A Delaware judge ordered JPMorgan to keep paying Charlie Javice's legal fees, rejecting the bank's bid to stop payments after her fraud conviction. The fees included $530 for gummy bears.
Alpha Score of 56 reflects moderate overall profile with strong momentum, poor value, moderate quality, moderate sentiment.
JPMorgan Chase must continue covering the legal fees of Charlie Javice, a Delaware judge ruled Thursday. The bank had asked to stop payments after Javice was convicted of defrauding the company during its acquisition of her startup, Frank.
The ruling came after JPMorgan argued that the conviction voided its obligation to indemnify her legal costs. The judge disagreed, saying the indemnification agreement signed at closing did not include a clause that terminated coverage upon a criminal conviction. The agreement remains in force, the judge wrote.
Javice was found guilty in April of misleading JPMorgan about the number of customers Frank had when the bank bought the education-finance startup for $175 million in 2021. The bank later wrote off the entire investment. Her sentencing is scheduled for October.
JPMorgan disclosed in court filings that it had already paid more than $2 million in legal fees for Javice. The expenses included $530 for gummy bears, according to the bank. The judge did not single out that item in the ruling.
The bank had argued that continuing to pay for a convicted fraudster's defense was against public policy. The judge rejected that argument, noting that the contract's plain language required payment regardless of the outcome of the case.
Javice's lawyers said the ruling was consistent with the agreement. They had argued that JPMorgan was trying to avoid a contractual obligation after the deal turned sour.
The decision means JPMorgan will keep writing checks for Javice's legal team as she prepares for sentencing and any appeal. The total bill could grow further before the case ends.
JPMorgan shares were little changed on the news. The stock traded at $334.47, up 0.12% on the day. The bank's Alpha Score of 56 out of 100 reflects a moderate outlook, according to AlphaScala's proprietary model.
The case is one of several high-profile disputes over indemnification clauses in acquisition agreements. The ruling may influence how banks draft such provisions in future deals.
A spokesperson for JPMorgan did not immediately respond to a request for comment. Javice's lawyers declined to comment beyond the court filing.
For more on JPMorgan, see the JPM stock page.
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