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This is the case of Schwartz v. Cognizant Technology Solutions Corp., Case number 2021-0634, filed in the Court of Chancery of the State of Delaware.

Cognizant is an American multinational information technology services and consulting company headquartered in New Jersey. Steven E. Schwartz is the former chief legal officer of Cognizant, who has been embroiled in criminal and civil litigation in recent years.

On Thursday, Schwartz pushed back on Cognizant’s request that he cover his own legal fees relating to the lawsuit he filed in Delaware’s Court of Chancery, wherein he accused Cognizant of intentionally disrupting his ability to prepare for his criminal trial set in March 2023.

Schwartz filed a lawsuit against Cognizant in Delaware in July 2021 asking the court to prevent Cognizant from prosecuting a case against him in New York related to his legal defense costs in several civil and criminal cases. According to Cognizant, under its bylaws and an indemnification agreement with Schwartz, it has been paying nearly all of his legal expenses since 2019.

In August Cognizant filed a motion requesting that Schwartz give them a detailed accounting of the attorney’s fees and costs he incurred in the Chancery Court case. Cognizant claims that Schwartz was not entitled to advancement or indemnification in that lawsuit.

In response, Schwartz’s attorney, Adam Balick of Balick & Balick LLC, argued “We don’t do indemnification in stages. We wait until the end.” Balick said Cognizant’s motion was premature. He further argued that Schwartz’s pending criminal case will most likely “resolve the vast majority of the issues surrounding indemnification,” and according to Balick, “We’re almost there.”

Schwartz along with former Cognizant president, Gordon Coburn, are facing criminal charges stemming from 2019 allegations that both men violated the Foreign Corrupt Practices Act by allegedly bribing an official in India. In February 2019, Federal prosecutors filed civil and criminal charges against Coburn and Schwartz, which set off a slew of additional subsequent lawsuits in a number of states.

Attorney Balick said that Cognizant is cooperating with the authorities in the prosecution of the criminal case against his client, and he implied that the motion filed by Cognizant in August was intentionally made at a critical stage, in an effort to interfere with Schwartz's ability to prepare for his criminal trial in March.

Balick said that “Cognizant is invested in the outcome of that case.” “In every phase of Mr. Schwartz’s defense in the criminal case, he’s confronted with [Cognizant] filings” in other cases, he said, “often at critical moments in his criminal defense.” In June 2021, Cognizant filed a lawsuit in New York federal court against an attorney that Schwartz hired for his defense. Cognizant sued Jeremy I. Bohrer and the four attorneys that work in his firm alleging fraud and civil conspiracy.

Cognizant claims the firm overcharged for its services and took advantage of Cognizant’s contractual requirement to pay Schwartz’s advance fees and costs. In response to the New York lawsuit, Schwartz sued Cognizant in Chancery Court alleging that the New York lawsuit violated a Delaware forum provision in the indemnification agreement that he signed with the company in 2013.

In March 2022, Chancellor Lori W. Will denied Schwartz’s motion for an anti-suit injunction and denied his request to hold Cognizant in contempt for prosecuting the claims against his attorneys in New York.

On Thursday, Cognizant’s attorney, David E. Ross of Ross Aronstam & Moritz LLP, argued that it was completely reasonable and appropriate to seek legal fees for the Chancery Court action because it did not fall into the so-called “buckets” of advanceable legal expenses under the company’s 2013 bylaws or its indemnification agreement.

According to Ross “There’s a bucket under which advanceable cases fall, and this falls outside of it.” Ross said that Cognizant was looking for two things from the court: (1). an accounting of Schwartz’s legal expense in the Chancery lawsuit, which according to Ross, he refused to provide, and (2). a court order allowing Cognizant to offset those costs against Schwartz’s future billing.

Vice Chancellor Will noted, “What’s so strange about this is I’m dealing with an injunction lawsuit and within it, there’s a motion for advancement.” “Why couldn’t all this have been dealt with at the indemnification stage?” To which Ross replied. ”We don’t see any reason that this couldn’t be dealt with now.”

Ross told the court “We are advancing tens of millions of dollars.” “What we’re talking about here is not a pittance. And enforcing one’s contractual rights is not bad faith.”

The court took the matter under submission.

Schwartz v. Cognizant Technology Solutions Corp., Case number 2021-0634, filed in the Court of Chancery of the State of Delaware.