The U.S. Eleventh Circuit Court of Appeals, applying Florida law, recently held that a professional services exclusion, which excluded coverage for any loss arising out of any insured’s performance of professional services, barred coverage for claims arising from an alleged Ponzi scheme. Stettin v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2017 WL 2858768 (11th Cir. July 5, 2017).

"The Parent Bank entered into this insurance contract with its eyes wide open and its wallet on its mind."

For many litigants, the decision whether to prosecute or defend a lawsuit vigorously boils down to a rather basic calculus: What are my chances of success? What is the potential recovery or loss? Is this a “bet the company” litigation? And, how much will I have to pay the lawyers? In many respects, it is not all that different from a poker player eyeing his chip stack and deciding whether the pot odds and implied odds warrant the call of a big bet.

For many litigants, the decision whether to prosecute or defend a lawsuit vigorously boils down to a rather basic calculus: What are my chances of success? What is the potential recovery or loss? Is this a "bet the company" litigation? And, how much will I have to pay the lawyers? In many respects, it is not all that different from a poker player eyeing his chip stack and deciding whether the pot odds and implied odds warrant the call of a big bet.

Recoupment is an equitable remedy – not expressly addressed in the Bankruptcy Code – that permits the offset of mutual debts arising out of the same transaction or occurrence. Unlike typical setoff, if recoupment applies, prepetition debts can be set off against postpetition debts. A recent decision from the Delaware bankruptcy court demonstrates that the availability of recoupment often depends on how the court defines the contours of the “same transaction or occurrence” requirement.

 The U.S. Fifth Circuit Court of Appeals recently upheld summary judgment dismissing all claims against an insurer based on a bankruptcy and creditors exclusion in the insured’s directors and officers (“D&O”) policy. Markel Am. Ins. Co. v. Huibert Verbeek, No. 1:15-51099 (5th Cir. Sept. 27, 2016).

The U.S. Court of Appeals for the Fifth Circuit recently held that a Creditor Exclusion provision in D&O insurance coverage may result in significant limitations on the coverage provided to the D&Os, when the underlying dispute is with a creditor in its capacity as such.

While the frequency of Bankruptcy filings is unpredictable year over year, their presence is certain when pursuing subrogation claims. Now, throw into the mix an unsteady economy and the threat of a Defendant filing for bankruptcy is present. The Federal Bankruptcy Code provides for insurers to get around the automatic stay of a bankruptcy filing in certain situations. Below is a description of the three most commonly used sections to avoid the automatic stay in bankruptcy filings.

On September 13, the OCC published a proposed rule under the authority of the National Bank Act, to provide a framework for receiverships for national banks that are not insured by the FDIC.

Excalibur had been in run-off status since 2003, and under regulatory supervision since at least 2013. A Pennsylvania court has now placed Excalibur into liquidation based on three grounds: (1) insolvency – Excalibur’s admitted assets did not exceed its liabilities plus the greater of its capital and required surplus or capital stock; (2) Excalibur’s total adjusted capital was less than its mandatory control level risk-based capital; and (3) Excalibur’s board of directors and sole shareholder consented to liquidation.