Bankruptcy Fraudulent Transfers as Securities Claims: Opening the Door to Recovering D&O Insurance Proceeds

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, March 9, 2023

1:00pm-2:30pm EST, 10:00am-11:30am PST

(Alert: Event date has changed from 2/8/2023!)

or call 1-800-926-7926

This CLE webinar will discuss the novel approach for accessing D&O insurance proceeds to repay fraudulent transfers taken in Verizon Commc’ns. Inc., et al. v. Nat’l Union Fire Ins. Co. of Pittsburgh, et al, Case No N18C-08-086 EMD CCLD (Del. Super. Ct. Oct. 18, 2022). The panel will discuss the rationale of Verizon, whether the Bankruptcy Code's definition of securities in Section 510 must be the same as the definition of securities under an insurance policy, whether claims treated as securities for purposes of D&O coverage must be subordinated under Section 510, and how litigation trustees and committees can leverage the case to augment the estate.


In Verizon, the Delaware Superior Court ruled that when suing companies for fraudulently transferring money or assets, often to benefit company insiders, a litigation trustee representing the debtor's creditors can be deemed a "securities holder" in some circumstances. This would potentially transform fraudulent transfer claims in bankruptcy into securities claims for which D&O coverage might be available.

D&O insurance often covers securities claims against a company and its executives, creating a significant source for repayment to creditors. Furthermore, many policies cover not only settlements and judgments but also costs, experts' fees, and attorneys' fees.

The ruling could also complicate applying the Bankruptcy Code's priority schemes, such as claim classification and treatment, plan voting, or payouts. Courts will have to decide whether the term "securities" as used in Bankruptcy Code Section 510 means the same as it does in the relevant D&O policy.

Listen as this experienced panel discusses this novel approach for accessing D&O insurance proceeds to repay fraudulent transfers.



  1. Overview of Verizon Commc’ns. Inc., et al. v. Nat’l Union Fire Ins. Co. of Pittsburgh
    1. Choice of law and rules of policy interpretation
    2. Key policy definitions, provisions, and exclusions
    3. Derivative standing issues
    4. Reasonable expectation of coverage defense
  2. Bankruptcy applications and strategies


The program will review these and other pivotal issues:

  • What was the court's logic in holding that fraudulent transfer claims were securities claims?
  • What is the relevant policy language to review?
  • Does the analysis change based on who "owns" the D&O policy?


Selbst, Stephen
Stephen B. Selbst

Herrick, Feinstein

Mr. Selbst has more than 30 years of experience representing debtors, creditors, official committees, distressed...  |  Read More

Smith, Steven
Steven B. Smith

Herrick, Feinstein

Mr. Smith focuses his practice on complex corporate restructuring and creditors' rights, including in court Chapter...  |  Read More

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