Bankruptcy and D&O coverage.

Directors & BoardsVol. 25 Nbr. 4, June 2001

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Summary


Bankruptcy planning

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Extract


Bankruptcy and D&O coverage.

When bankruptcy looms or is in fact filed, board members must reexamine their current coverage. The ramifications of a bankruptcy filing raise significant insurance issues.

THERE IS CONCERN in the D&O marketplace that a filing for bankruptcy can detrimentally effect the value of a directors and officers insurance policy. In the bankruptcy context, the question is whether the proceeds of the insurance policy become an asset of the bankruptcy estate, which could mean that a bankruptcy truste...

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