Buzz Archive:
Bankruptcy and D & O Claims Settlements

by Kevin LaCroix, OakBridge Insurance Services, 10/30/2007

Why is D&O insurance important? Consider the following: the directors and officers of a private equity or venture-backed company take it to bankruptcy and want access to the insurance proceeds to fund defense expense or settlements. However, the bankruptcy trustee wants the proceeds preserved so they are available to satisfy the trustee's own claims. Who wins?

A recent decision in the federal bankruptcy court in Delaware arising out of the bankruptcy of World Health Alternatives addressed the issue whether the directors and officers could access the proceeds of the bankrupt company's D & O policy to settle separate shareholders litigation pending against them.

Read more from this real life situation as Kevin LaCroix, OakBridge Insurance Services reviews the case and strategy.