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Post-Confirmation Settlement Agreements: The Implications on Insurance Proceeds
It is a common enough scenario ' a company purchases a directors and officers liability policy (a 'D&O Policy') ' to protect against any claims that may be brought against its directors and officers. The D&O Policy also may contain what is termed 'entity coverage' meaning that the policy may cover claims made both against the directors and officers, as well as the company itself. While the D&O Policy may be relatively straightforward in providing for the rights and obligations of the respective parties, if the company files for bankruptcy a whole host of issues arise. In this scenario, the laws governing bankruptcy and insurance may collide and, in some instances, are not easily reconcilable.
During the course of a bankruptcy, the directors and officers may become the target of multiple lawsuits by various constituents, including creditors and shareholders seeking to tap into the D&O Policy proceeds. Indeed, in some cases, the D&O Policy may be the most substantial asset through which the creditors will achieve any recovery. If litigation is brought against the debtor's directors and officers, whether in bankruptcy court or otherwise, oftentimes the parties seek to settle their claims. Among the many issues faced by the insurers and insureds (including the company, as well as the directors and officers) are the structure of any such settlement, the resolution of competing interests under the D&O Policy, and the rights of the respective parties to the proceeds of the D&O Policy. Questions arise as to whether the terms of any settlement, which if funded from the proceeds of such D&O Policies, may ultimately be approved by the bankruptcy court. Given that most bankruptcy courts find that where the company is the named insured, a D&O Policy is property of a debtor's bankruptcy estate (under certain circumstances, the 'proceeds' of the policy may also be a part of the debtor's estate), any settlement of litigation seeking payment from the D&O Policy must be approved by the bankruptcy court in accordance with Rule 9019(a) of the Federal Rules of Bankruptcy Procedure.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.