May 28, 2020

Almost As Certainly As Night Follows Day: “Preference” Proceedings Follow Bankruptcy

Bankruptcy Claim

The recent pandemic-induced spike of bankruptcy filings by major retail apparel chains will likely lead to a flood of “preference” proceedings in which attempts will be made to “clawback” payments to vendors. A preference is a payment to a creditor in the days leading up to a bankruptcy by which a creditor was improperly preferred over others. When this happens, the Bankruptcy Code allows the trustee (and sometimes others) to bring a preference action to recover the preferential payments for the benefit of the debtor’s estate. The Bankruptcy Code defines a preferential payment as any payment for a debt made… Read more

Sep 2, 2016

Directors and Officers Insurance—Some Pitfalls

Business Meeting

In recent instances, a number of boards that have come to us for representation have been chagrinned to discover that their insurance policies for directors and officers liability (“D&O”) did not fully cover claims by shareholders or unit owners. The result has been anxiety for board members, litigation expense for the building that would have been avoidable, and conflicts with the managing agent who had worked with a broker to place the insurance. It is important for board members and managing agents to understand the terms of D&O policies at the time they are purchased. All D&O insurance is not… Read more