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.
Introduction
The Supreme Court will consider these key questions next term in Czyzewski v Jevic Holding Corp:(1)
In a world of free-ranging capital and cross-border transactions, the question of whether US courts will apply US law to transactions taking place in other countries is important. It is therefore a matter of both interest and concern that judges in the Southern District of New York have reached opposite conclusions when asked to give extraterritorial effect to the avoidance or 'clawback' provisions of the Bankruptcy Code.
Canon of statutory construction
The US Court of Appeals recently decided in In re Tribune Co Fraudulent Conveyance Litigation(1) that Section 546(e) of the Bankruptcy Code(2) impliedly pre-empts state fraudulent conveyance laws that creditors might otherwise use to unwind payments made by a corporate debtor to public shareholders in a pre-bankruptcy leveraged buy-out.
In In re Caesars Entertainment Operating Co v BOKF, NA(1) the US Court of Appeals for the Seventh Circuit reviewed a bankruptcy court's denial of a trustee's motion for a temporary injunction staying litigation between non-debtors.
Facts