The Insured vs. Insured exclusion is a standard provision found in most D&O insurance policies. As its name implies, the exclusion precludes coverage for claims brought by one insured against another insured. The exclusion is a frequent source of coverage disputes, particularly in the bankruptcy context, due to frequent disagreements over the exclusion’s application to claims brought against company management by representatives of the creditors or of the bankrupt estate. One recurring dispute of this type is the question of the exclusion’s applicability to claims brought against company management by the company as debtor-in-possession. A recent appellate question considered a variation of this question – that is, whether the exclusion precluded coverage for claims brought against company management by the trustee of a liquidation trust as an assignee of the company as debtor in possession. In a June 20, 2017 opinion (here), the Sixth Circuit (applying Michigan law) held that the exclusion precluded coverage for the liquidation trustee’s claim. The appellate ruling raises some interesting issues, discussed below.
Continue Reading Insured vs. Insured Exclusion Precludes Coverage for Claim Assigned by Debtor in Possession to Liquidation Trustee
Guest Post: Please Buckle Your Seatbelts and Check Your D&O Insurance: A Gloomy Forecast Is Ahead
Complicated coverage issues frequently arise in connection with D&O claims, and that is particularly true with respect to claims arising in bankruptcy. In the following guest post, Paul Ferrillo and Ronit Berkovich of the Weil, Gotshal & Manges law firm take a look at the key D&O insurance considerations that companies heading into bankruptcy should keep in mind. I would like to thank Paul and Ronit for their willingness to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Paul and Ronit’s guest post.
Continue Reading Guest Post: Please Buckle Your Seatbelts and Check Your D&O Insurance: A Gloomy Forecast Is Ahead
D&O Insurance: Debtor-in-Possession Claims and the Insured vs. Insured Exclusion
The traditional Insured vs. Insured exclusion found in many D&O insurance policies is a frequent source of claims disputes, particularly in the bankruptcy context. As its name suggests, the Insured vs. Insured exclusion precludes coverage for claims brought by one Insured against another Insured. The typical Insured vs. Insured exclusion includes a provision (often
Bankruptcy Court: D&O Insurance Available for MF Global Executives’ Defense, Without Restriction
On September 4, 2014, in the latest in a series of rulings on the issue of whether MF Global’s D&O insurers may pay the defense expenses the company’s former officers and directors are incurring in the various lawsuits pending against them, Southern District of New York Bankruptcy Judge Martin Glenn held that the insurers may
Guest Post: Bankruptcy in Securities Class Actions: Case Outcomes, Individual Liability and Side A Protection
Of the different contexts within which securities class action lawsuits arise, one of the most significant is the bankruptcy context. As detailed in the following guest post from Michael Klausner and Jason Hegland of Stanford Law School, securities class action lawsuit arising in bankruptcy are different from cases involving solvent companies. Their guest post provides
More About D&O Insurance and Bankruptcy
Although D&O insurance represents an important risk management tool for every company, the protection that a D&O insurance policy affords directors and officers is particularly important in the bankruptcy context, when the company is no longer able to indemnify the individuals. Yet, as industry practitioners know, a number of issues recur in the bankruptcy context
UK Ministry Proposes Expanding Director Liability.
As part of its scheme to improve corporate transparency and director accountability, a UK government ministry has proposed what UK Business Secretary Vince Cable calls “tough measures” to “give the public greater confidence that irresponsible directors will face consequences for their actions.” These proposals, if adopted, could significantly increase UK corporate directors’ liability exposures in
D&O Insurers Fund Massive, Complicated Bankruptcy Settlement
The bankruptcy context is particularly ripe for D&O claims, and it also represents a particularly difficult claims context for D&O insurers. Anyone with any doubts about just how complicated bankruptcy claims can be will want to take a look at the settlement that the various concerned parties recently reached in the bankruptcy of defunct Florida
D&O Insurance: Advancing Defense Costs in Bankruptcy
After entity coverage began to be added to the D&O insurance policy a couple of decades ago, a recurring problem in the bankruptcy context was whether or not the D&O policy proceeds were property of the estate under Bankruptcy Code Section 541(a) and subject to the automatic stay under Bankruptcy Code Section 362.
Automatic Bankruptcy Stay Lifted to Permit MF Global’s D&O and E&O Insurers to Pay Defense Costs
The automatic stay in bankruptcy may be lifted to permit MF Global’s D&O and E&O insurers advance the defense expenses of individual defendants in the underlying litigation arising out of the company collapse, notwithstanding the objections of the failed company’s commodities customers, according to an April 10, 2011 ruling from Southern District of New York