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While the market is swimming with innovative and highly leveraged financial transactions, and many parties are enjoying sizeable gains, some of those involved in these enterprises ultimately will become insolvent. A fraction of these insolvencies will result from fraudulent investment schemes perpetrated by multiple parties acting in concert for their mutual benefit. Innocent victims, including creditors and investors, will bear the financial brunt of the insolvencies, and will be eager to recover from all parties that participated in the fraud.

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The Fourth Circuit, on June 15, 2007, affirmed the dismissal of a Chapter 11 reorganization petition filed by a tenant debtor in a commercial lease dispute. <i>Maryland Port Administration v. Premier Automotive Services, Incorporated (In re Premier Automotive Services, Incorporated).</i> As the Court of Appeals explained, the tenant had filed its Chapter 11 petition 'in order to forestall eviction on an obviously expired lease ' to prevent the [lessor] from evicting the debtor from the [lessor's] property,' seeking to tie up the landlord 'in endless, fruitless litigation.' According to the court, the Chapter 11 filing here 'demonstrate[s], unfortunately, how the good and useful ends of the bankruptcy process can be badly abused.'

<i>Credit Lyonnais Bank Nederland, N.V. v. Pathe Communications Corp.</i> stands for the proposition that directors and officers of a Delaware corporation that is either insolvent or in the 'zone' of insolvency owe fiduciary duties to creditors as well as stockholders. In essence, it provided a 'shield' to directors against shareholder suits alleging that directors breached their duties to shareholders by acting to protect creditors. Now, the Delaware Supreme Court may have "broken the shield."

Virtually every directors' and officers' ('D&amp;O') insurance policy contains personal conduct exclusions. Insurers frequently rely on such exclusions to deny or limit coverage. For example, in many of the recent claims involving financial restatements or stock options, D&amp;O insurers have asserted that the personal conduct exclusions, such as those relating to illegal profit, deliberate fraud, and deliberate criminal acts, diminish or preclude coverage. Although insurers frequently rely on these personal conduct exclusions, the personal conduct exclusions are, in practice, limited in scope and application. This article highlights some of the key limitations.

In many instances, an insured does not comply with the terms of every condition stated in a policy. Sometimes this is because the insured is not aware of the particular requirements of the policy, sometimes it is because a carrier has not required (or has waived) compliance, and sometimes it is because it is simply not practical, or possible, to comply with all of the requirements of the conditions. In many of these circumstances, insurance carriers reserve a right to deny coverage, or deny coverage on the ground that an insured has failed to comply with one or more conditions in the policy. However, whether or not an insured has complied with all of the particulars of a condition in a policy does not determine whether the insured actually forfeits coverage under the policy.

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For years, insurers have invoked the so-called 'late notice' defense under New York law, with relatively frequent success, to deny insurance coverage to insureds in circumstances in which the insured provides notice that is not timely under New York's traditional 'no prejudice' rule. Under this 'no prejudice' rule, an insurer generally need not show any prejudice suffered by the insurer as a result of an insured's untimely notice of an occurrence or claim giving rise to liability. Insurers have been able to cite certain New York case law stating that, with a few exceptions, an insurer may avoid coverage if the insured's notice was untimely on the theory that notice is a condition precedent to coverage under the policy. <i>See, e.g., Security Mut. Ins. Co. v. Acker-Fitzgerald Corp.</i>, 293 N.E.2d 76, 78 (N.Y. 1972); <i>American Home Assurance Co. v. International Ins. Co.</i>, 684 N.E.2d 14, 16 (N.Y. 1997). This insured-unfavorable rule of law, however, appears to be in the process of changing. Recent New York case law indicates a shift away from a 'no prejudice' rule, and an even more recent proposed state statute would permit an insurer to deny insurance coverage only in circumstances in which the insurer could 'demonstrate that it has suffered material prejudice as a result of the delayed notice.' For these reasons, New York clearly appears to be moving toward the large majority of other states, which require an insurer to demonstrate material prejudice as a predicate to avoiding coverage in the context of the late notice defense.

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The latest study on CRM projects (known as the CHAOS Chronicles), conducted in 2006, shows that close to 50% of projects fail, much lower than the over 74% figure that has been circulating for years. This is good news: It means, in part, that many industries are learning to manage CRM as a living entity that changes and grows as an organization does. It also reveals that we are getting wiser about our approach to CRM projects, heeding the advice that the best way to 'eat an elephant' is one piece at a time.

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As Director of Technology and Marketing, much of the responsibility of selecting, maintaining and upgrading to the most powerful technology available is mine. My department also helps coordinate the firm's marketing efforts, such as mailings and events. As part of the firm's mission to provide expertise in multiple practice areas, we have come to understand how vital it is to encourage flexibility and mastery of the latest technology among its attorney users. To achieve results efficiently, a firm must have a streamlined approach to stay competitive and run efficiently.