D&O Insurance Roadblocks In Bankruptcy Are Unwarranted

Law360, New York (May 2, 2014, 3:16 PM EDT) -- As those involved in directors and officers insurance claims well know, a recurring D&O insurance problem is the question of whether or not the D&O insurer for a bankrupt company can pay the costs of the bankrupt company’s former directors and officers incurred in defending claims against them.

Disputes arise when the individuals seek to have the stay in bankruptcy lifted to allow the insurer to pay their defense expenses. Often, creditors or the bankruptcy trustee will oppose lifting the stay, arguing that the D&O policy...
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