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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Tuesday, January 26, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will provide insight and analysis on the types of claims that may entitle directors and officers to indemnity protection and how their indemnity claims are treated in and affected by a company's bankruptcy. The panel will also discuss the effect of bankruptcy on D&O insurance coverage and the issues considered in determining who is entitled to proceeds from the D&O insurance policy in a Chapter 11 proceeding.

Faculty

Brett M. Amron
Partner
Best Amron

Mr. Amron advises clients in complex business and bankruptcy litigation matters with an emphasis on director and officer liability, breach of fiduciary duty, partnership and shareholder disputes, fraud, and avoidance and recovery of preferential and fraudulent transfers. Mr. Amron represents court-appointed fiduciaries, trustees, receivers, corporations, shareholders, individuals, creditors’ committees, and secured and unsecured creditors. Mr. Amron speaks and writes frequently on various topics related to his practice.

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Leslie A. Davis
Partner
Troutman Pepper Locke LLP

Ms. Davis has significant experience representing insurance companies in coverage matters, with a focus on environmental and mass tort liabilities and professional liability coverage disputes. She regularly represents insurance and reinsurance companies in negotiations, mediations, and arbitrations involving disputes arising out of their reinsurance relationships.

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Lydia R. Webb
Partner
Gray Reed & Mcgraw LLP

Ms. Webb focuses her practice on representing and advising debtors, creditors, committees and post-confirmation trustees in bankruptcy cases and other insolvency or restructuring scenarios. She has guided clients to successful results in complex cases before courts throughout Texas and many other states, including Oklahoma, Delaware and New York. With cases spanning various industries--oil and gas, healthcare, retail, manufacturing, restaurants--Ms. Webb focuses on gaining a strong grasp of the industry-specific regulations and issues that will have a big impact on the outcome of the bankruptcy.

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Description

A company's bankruptcy filing often places its directors and officers in a vulnerable position. While the company may find instant relief from litigation, its directors and officers remain exposed to being sued individually or collectively.

Whether directors and officers are entitled to indemnity protection will often depend on the indemnity claim's nature and the underlying claims against them. Does the indemnification obligation arise under state law or in the company's formation documents? Are they alleged to have committed fraud or negligence? A shareholder derivative action will be viewed differently from allegations of misappropriation of trade secrets.

Increasingly, officers and directors have to litigate the enforceability of bankruptcy exclusions, which purport to deny coverage for claims brought by the debtor, trustees, and others. Even if they are entitled to indemnity protection, the directors and officers' claims may be subordinated under Section 502 or 510 of the Bankruptcy Code. And when they turn to the company's D&O insurance policy, directors and officers will likely need to seek a bankruptcy court determination of whether the proceeds of that policy belong to the estate or the individuals themselves.

Listen as our authoritative panel discusses the sources of director and officer indemnity claims and treatment of those claims in bankruptcy. The panel will also discuss coverages that should be included in any company's D&O insurance policy, and how best to pursue collection under the D&O policy in a Chapter 11 proceeding.

Outline

  1. Nature of indemnity claim
    1. Source: state law, contract, formation documents
    2. Scope: exception for criminal conduct, gross negligence with willful misconduct
    3. Types of claims: shareholder action, discrimination, trade secret misappropriation
  2. Who is liable and for what
    1. Directors and officers
    2. Company
    3. Insurance policy
  3. Treatment of claims in bankruptcy
    1. Subordination (Bankruptcy Code Sections 502 or 510)
    2. Allowed unsecured claims
    3. Other

Benefits

The panel will review these and other key issues:

  • Are bankruptcy exclusions in D&O policies enforceable?
  • When is a director or officer entitled to indemnification for third-party claims?
  • How are those indemnity obligations impacted by the bankruptcy of the company?
  • What are the coverages to include in the D&O insurance policy? What endorsements may ensure that directors and officers remain covered after a bankruptcy?
  • How does a Chapter 11 proceeding impact insurance coverage and distribution of proceeds?