Leaving Insurers On Hook Despite Cesser Clauses

Law360, New York (October 27, 2009, 5:52 PM EDT) -- The U.S. Bankruptcy Court for the Southern District of New York recently prohibited insurers from terminating debtors' insurance contracts based on so-called "cesser" clauses, which provided for the automatic termination of insurance coverage upon the commencement of proceedings under any bankruptcy or insolvency law.

LaMonica v. N. of Eng. Protecting & Indem. Ass'n Ltd. (In re Probulk Inc.), 407 B.R. 56 (Bankr. S.D.N.Y. 2009).

Probulk involved the procedurally consolidated Chapter 7 bankruptcy cases of 73 debtors, each of which owned, operated or managed one or more...
To view the full article, register now.