PHILADELPHIA (LN) — U.S. District Judge Gerald J. Pappert denied a motion for judgment on the pleadings filed by Patrick Retif, who accused his former employer, Exocel Bio Inc., of breaching an indemnification agreement. The court held that the agreement prohibits indemnification before the "final disposition" of the underlying proceeding, which is still active.

Retif, who served as a director, acting CEO, and advisory board member before his departure, was sued by Exocel Bio in September 2024. The company alleged misappropriation of trade secrets, conversion, breach of contract, and breach of fiduciary duty. Retif filed counterclaims accusing Exocel Bio of breaching the indemnification agreement.

The dispute centers on an indemnification agreement signed when Retif joined the company in April 2021. The contract explicitly stated that "no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding."

Judge Pappert ruled that because the lawsuit is still pending, Retif cannot seek indemnification at this time. "This action is pending, and Retif never points to a provision that provides otherwise," Pappert wrote.

Retif also sought the advancement of legal expenses, arguing that the agreement required Exocel Bio to pay costs "actually and reasonably incurred" within 30 days of receiving a request. However, the court denied this aspect of the motion as well. Exocel Bio denied receiving a formal request for advances, noting only that Retif’s counsel had sent a general communication regarding indemnification.

"Retif never attached the communication to the pleadings, nor has he shown Exocel Bio received proof or a statement of expenses he actually and reasonably incurred," Pappert wrote. The judge noted that while Retif claimed to have incurred $53,679.64 in attorney’s fees, that figure was not part of the pleadings. Without a proper statement of expenses, a genuine issue of material fact remained regarding whether Retif had satisfied the conditions for advancement.

Pappert also rejected Retif’s request for declaratory relief, ruling it was duplicative of his breach of contract claim.

The case remains pending in Philadelphia federal court.