You are here: / / BANKRUPTCY EXCEPTION TO THE INSURED VS INSURED EXCLUSION IN THIS DIRECTORS...
, ,

BANKRUPTCY EXCEPTION TO THE INSURED VS INSURED EXCLUSION IN THIS DIRECTORS & OFFICERS LIABILITY INSURANCE POLICY APPLIED TO THE CREDITOR TRUST FORMED TO PURSUE THE BANKRUPTCY ESTATE’S LEGAL CLAIMS ON BEHALF OF UNSECURED CREDITORS (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Renwick, in a matter of first impression, determined the bankruptcy exception to the insured vs. insured exclusion applied to the Directors & Officers (D & O) liability insurance policy:

Plaintiff Westchester Fire Insurance Co. … commenced this action seeking a declaration that it has no coverage obligations to defendants insureds, arguing primarily that the “insured versus insured” exclusion of a Directors and Officers (D & O) liability insurance policy, procured by RCS Capital Corporation (RCAP), bars coverage of claims asserted against defendants, … RCAP’s former directors and officers. Defendants insureds contend, among other things, that coverage exists under the bankruptcy exception to the insured vs. insured exclusion. The claims, herein, arose after RCAP’s bankruptcy.

The Creditor Trust was formed, pursuant to the reorganization plan, to pursue the bankruptcy estate’s legal claims on behalf of the unsecured creditors … . …

This appeal raises an issue of apparent first impression of whether a D & O liability policy’s bankruptcy exception, which allows claims asserted by the “bankruptcy trustee” or “comparable authority,” applies to claims raised by a Creditor Trust, as a post-confirmation litigation trust, to restore D & O coverage removed by the insured vs. insured exclusion. For the reasons that follow, we find that the bankruptcy exception to the insured vs. insured exclusion, applies to restore coverage. Specifically, we interpret the broad language “comparable authority” to encompass a Creditor Trust that functions as a post-confirmation litigation trust, given that such a Creditor Trust is an authority comparable to a “bankruptcy trustee” or other bankruptcy-related or “comparable authority” listed in the bankruptcy exception. Westchester Fire Ins. Co. v Schorsch, 2020 NY Slip Op 04627, First Dept 8-20-20

 

You might also like
FAMILY COURT’S TERMINATION OF MOTHER’S PARENTAL RIGHTS WAS NOT SUPPORTED BY THE EVIDENCE, MOTHER WAS DEALING WITH HER MENTAL HEALTH AND DRUG PROBLEMS AND THE SPECIAL NEEDS OF THE CHILDREN WERE BEING ADDRESSED (SECOND DEPT). ​
A Prima Facie Case Under the Dram Shop Act Had Been Made Against Both Bars Which Served Plaintiff’s Decedent, Even Though the Alcohol Served at the First Bar Would Have Metabolized by the Time of the Accident Had Plaintiff’s Decedent Not Continued to Drink at the Second Bar
Violation of Confrontation Clause Was Harmless Error
PLAINTIFFS ENTITLED TO DAMAGES FOR REDUCED PROPERTY VALUE, PUNITIVE DAMAGES, AND INJUNCTIVE RELIEF IN THIS TRESPASS BY ENCROACHMENT ACTION, APPELLATE COURT CAN MAKE ITS OWN CREDIBILITY ASSESSMENTS IN THE APPEAL OF A BENCH TRIAL (SECOND DEPT).
JUROR MISCONDUCT REQUIRED A NEW TRIAL, JURORS SHARED INFORMATION FROM A FORMER DA AND A FORMER POLICE OFFICER DURING DELIBERATIONS.
Presumption Vehicle Was Operated with Owner’s Consent Not Overcome—Defendant Not Entitled to Summary Judgment
Permanent Neglect Established—Mental Illness
Ineffective Assistance of Counsel Mandated New Trial—Difference Between Federal and State Ineffectiveness Criteria Explained

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

THE EVIDENCE OF PHYSICAL INJURY WAS LEGALLY INSUFFICIENT, ASSAULT THIRD CONVICTION... PLAINTIFFS SUED A FOSTER-CHILD PLACEMENT SERVICE FOR FRAUD AND NEGLIGENCE AFTER...