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Litigation Trustee and Committee Claims Against Insiders, Auditors, and Other Third Parties in Asset Sale Cases

Addressing Limitations on Recovery Such as In Pari Delicto, Standing, D&O Policies as Property of the Estate and the Insured vs. Insured Exclusion in D&O Policies

Recording of a 90-minute CLE webinar with 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.

Conducted on Tuesday, October 15, 2019

Recorded event now available

or call 1-800-926-7926

This CLE course will provide bankruptcy and litigation counsel with a review of suits against corporate insiders and outside third-party professionals, theories supporting liability, and the evolving and complex defenses and limitations to recovery such as in pari delicto, standing, and the insured vs. insured exclusion. The panel will also discuss the management of D&O policies and proceeds inside a bankruptcy-related litigation to preserve a source of recovery.


Trustees, creditors' committees and post-confirmation trusts are aggressively pursuing claims against third parties such as officers and directors, as well as accountants, auditors, attorneys, lenders, and advisers for their role in the debtor's insolvency. Allegations include breach of fiduciary duty, fraud, aiding and abetting, and malpractice.

Post-confirmation, issues of the bankruptcy court’s continuing subject matter jurisdiction may arise, and the answer may vary circuit to circuit.

The in pari delicto defense can prevent the trustee, committee or trust, each of which stands in the shoes of the debtor, from pursuing damages resulting from actions by the debtor's officers and directors. This defense is evolving, as are the exceptions to the defense.

D&O policies, where the available proceeds may be reduced by the defense costs of targeted individuals, must be managed by the court to preserve a source of recovery; however, whether policy proceeds are property of the estate or may be so managed varies court to court and circuit to circuit. Another impediment to recovery is the insured vs. insured exclusion in D&O insurance policies as insurance recovery may be critical to obtaining any recovery. Cases are split on whether the exclusion applies across the range of estate representatives and plaintiffs. Listen as our authoritative panel of bankruptcy attorneys discusses recent trends in trustee, committee and post-confirmation trust litigation against insiders and third-party professionals. The panel will also review limitations on recovery posed by the in pari delicto doctrine,claim preservation and standing issues, the insured vs. insured exclusion to D&O policies, and recent cases, and also discuss the management of policy proceeds as a source of recovery.



  1. Trustee/committee claims against third parties
    1. Fraud
    2. Breach of fiduciary duty
    3. Aiding and abetting fraud and breach of fiduciary duties
    4. Deepening insolvency
    5. Fraudulent conveyance
  2. In pari delicto defense
    1. Standing to pursue claims
    2. Exceptions to the doctrine
    3. Various state cases and trends
    4. Application in bankruptcy setting
  3. D&O and Professional liability insurance coverage issues


The panel will review these and other key questions:

  • What trends exist in trustee, committee and post-confirmation trust suits against insiders and third parties and what are the common theories supporting the cause of action?
  • Is the in pari delicto defense a difficult obstacle to filing suit against insiders and third parties? How can the trustee, committee or post-confirmation trust defeat the defense?
  • Are D&O and other liability policy proceeds property of the estate and, whether or not property of the estate, can they be preserved as a source of recovery? How does the insured vs. insured exclusion in D&O policies limit recovery and how have courts interpreted its application in the current bankruptcy environment?


Keach, Robert
Robert J. Keach

Bernstein Shur Sawyer & Nelson

His practice focuses on the representation of various parties in workouts and bankruptcy cases, including debtors,...  |  Read More

Richman, Michael
Michael P. Richman

Steinhilber Swanson

Mr. Richman focuses on representing Chapter 11 debtors and creditors' committees and advises on virtually every...  |  Read More

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