All too often the task of procuring and renewing D&O insurance at a portfolio company is assigned to the portfolio company’s CFO or Controller, who employs an insurance broker to find the best price for the amount of coverage deemed appropriate by the broker. When such insurance is procured and thereafter renewed, the CFO/Controller simply reports to the board the fact of the procurement/renewal and few questions about the terms of coverage are discussed at the board level. This can be a big mistake.

When a company files for bankruptcy, employees are faced with uncertainty on a number of issues. Everything from outstanding wages to benefit entitlements are suddenly at risk. Further, when a company becomes insolvent, employees are often laid off in circumstances that fail to satisfy statutory or common law notice period entitlements. However, under the Bankruptcy and Insolvency Act (“BIA”), employees are often barred from fully recovering what they are owed.