A case decided last week by the Sixth Circuit illustrates the importance of seeking bankruptcy claim policy amendments when placing D&O coverage. Indian Harbor Ins. Co. v. Zucker (6th Cir. Jun. 20, 2017) involved the application of the insured-vs.-insured exclusion and specifically, whether the policy’s insured-vs.-insured exclusion precluded coverage for a claim brought by a company’s liquidating trust, to which the company’s claims had been assigned by the company as debtor-in-possession after the company filed for bankruptcy.
The Bottom Line
In a bout of déjà vu, the Supreme Court decided to hear California Public Employees’ Retirement System v. ANZ Securities, Inc., et al. to settle the issue of whether the Securities Act of 1933’s (the “Securities Act”) three-year statute of repose is subject to tolling.[1] On June 26, 2017, the Supreme Court made the following noteworthy and defendant-friendly holdings:
On May 8, 2017, the U.S. Bankruptcy Court for the Middle District of Florida entered an order compelling production of attorney-client communications between Regions Bank and its counsel, finding that Regions had put those communications “at issue” by raising a good faith affirmative defense under 11 U.S.C. § 548(c) in response to a fraudulent transfer claim brought against it. Welch v. Regions Bank (In re Mongelluzzi), No. 8:14-ap-00653-CED (Bankr. M.D. Fla. May 8, 2017), ECF No. 319 (Delano, J.) (herein Mongelluzzi).
(S.D. Ind. June 27, 2017)
In In re Lehman Bros. Holdings Inc. 855 F.3d 459 (2d Cir. 2017), the United States Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Bros.
(B.A.P. 6th Cir. June 20, 2017)
Permissive Abstention:
On April 3, 2017 the Suffolk County Supreme Court granted Nationstar Mortgage LLC’s motion for summary judgment to recover defaulted mortgage payments in a potentially trailblazing foreclosure decision. Nationstar Mortgage LLC v. MacPherson, 2017 NY Slip Op 27120 (Sup. Ct. Suff. Co.
TK Holdings, Inc., a subsidiary of Takata Corporation, and eleven (11) of its subsidiaries and affiliates have filed petitions for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 17-11375).