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Beyond Chapter 11: Entity Coverage for Directors and Officers
More than 90% of public companies purchase “entity coverage” as part of their directors' and officers' (D&O) insurance policies. Entity coverage protects the company itself ' as opposed to its directors and officers ' against securities claims. During the last 2 years, however, it would have been difficult for the director of any public company to avoid hearing that entity coverage creates an undue risk of depriving the director of D&O coverage if the company for which he or she serves files for bankruptcy. One major D&O insurer distributed a paper containing this gratuitous advice to the directors of every public company in the country. Many legal seminars and D&O coverage proposals prepared by brokers also warn of this danger. Not surprisingly, CEOs and general counsel often are questioned by their boards about D&O coverage in the event of bankruptcy.
The dire warnings find little support in bankruptcy case law. In a number of recent major bankruptcies, including Enron, courts have allowed directors and officers access to the proceeds of their D&O policies despite the presence of entity coverage. The Southern District of New York's decision in In re Adelphia Communications Corp., 298 B.R. 49 (S.D.N.Y. 2003), follows this trend. Adelphia's directors and officers were charged with fraud in numerous civil and criminal proceedings. The directors and officers sought relief from the automatic stay to access the proceeds of their D&O policies to pay for their defense of these fraud cases. Although Adelphia's D&O policies contained entity coverage for Adelphia itself, the securities actions had been stayed as to Adelphia, and thus Adelphia had not sought reimbursement of any defense costs relating to those actions.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Transfer Tax Implications on Real Property Leases
The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.