Insurance

A number of recent high-profile cases have been impacted by credit derivatives (e.g., Hovnanian, Sears, Caesars, iHeart). The panelists discuss how these situations have unfolded and their effects. What pre-filing diligence should a debtor perform in order to be prepared?

The only D&O insurance policy issues that get much attention — in the restructuring world, at least — are (1) the insured-vs.-insured exclusion and (2) obtaining stay relief to access policy proceeds. The panel will tell the “rest of the story” by addressing important — but often overlooked — coverage issues and offering practical advice for purchasing D&O insurance policies (on behalf of distressed entities) and monetizing such policies (on behalf of fiduciaries).

This panel will discuss how the D&O insurance policy of a company in chapter 11 is impacted by the company’s filing, and will include property-of-the-estate issues, stay relief and court authorization, and how to use the proceeds to drive settlements.

Director and officer (D&O) insurance policies typically cover certain claims against the D&Os by third parties (often shareholders) and claims by a trustee in bankruptcy. The policies also cover certain claims against the debtor company. This panel will discuss the different coverages, the types of claims that may be pursued against officers and directors by shareholders, creditors and a bankruptcy trustee, defenses often asserted to the claims, and potential policy exclusions that may affect coverage. The panel will also focus on the tension, and often litigation, over D&O insurance proceeds when there are competing claims by a trustee and by shareholders or creditors, including the circumstances that may justify entry of a bar order precluding third-party claims as part of a settlement of claims by the trustee.

Director and officer (D&O) insurance policies typically cover certain claims against the D&Os by third parties (often shareholders) and claims by a trustee in bankruptcy. The policies also cover certain claims against the debtor company. This panel will discuss the different coverages, the types of claims that may be pursued against officers and directors by shareholders, creditors and a bankruptcy trustee, defenses often asserted to the claims, and potential policy exclusions that may affect coverage. The panel will also focus on the tension, and often litigation, over D&O insurance proceeds when there are competing claims by a trustee and by shareholders or creditors, including the circumstances that may justify entry of a bar order precluding third-party claims as part of a settlement of claims by the trustee.

This panel will first review the scope and types of coverage actually found in a typical E&O Policy and D&O Policy. Second, the Panel will discuss how claims are made under these policies with emphasis on how to assert or plead a claim so as to preserve coverage. Third, the Panel will discuss the law governing the treatment of such policies as “property of the estate” and finally, they will review the treatment and possible priority of claims that are asserted and adjudicated against the Debtor prepetition.