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
THE BANK IN THIS FORECLOSURE ACTION WAS NOT REQUIRED TO DEMONSTRATE IT WAS A LICENSED DEBT COLLECTION AGENCY PURSUANT TO THE NYC ADMINISTRATIVE CODE; THE BANK DID NOT ATTACH THE BUSINESS RECORDS NECESSARY TO DEMONSTRATE DEFENDANT’S DEFAULT (SECOND DEPT).
DISCIPLINARY DETERMINATION WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE (SECOND DEPT).
RECORDS SUBMITTED BY THE BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT). ​
THE BURGLARY COUNT WAS JURISDICTIONALLY DEFECTIVE BECAUSE IT ALLEGED DEFENDANT WAS ARMED WITH A “KNIFE” WHICH IS NOT NECESSARILY A “DEADLY WEAPON;” THE ATTEMPT TO AMEND THE COUNT WAS NOT AUTHORIZED; THE SANDOVAL RULING WAS (HARMLESS) ERROR (SECOND DEPT).
HERE THE NATURE OF INFANT PLAINTIFF’S INJURIES WAS PROBATIVE OF HOW THE ACCIDENT OCCURRED; PLAINTIFF ALLEGED DEFENDANTS’ VAN RAN OVER INFANT PLAINTIFF’S FOOT; DEFENDANTS ALLEGED INFANT PLAINTIFF WAS INJURED WHEN SHE FELL OFF HER BICYCLE; PLAINTIFFS’ MOTION FOR A UNIFIED TRIAL ON LIABILITY AND DAMAGES SHOULD HAVE BEEN GRANTED (SECOND DEPT).
ALTHOUGH THE FAILURE TO SUBMIT A “NON-MILITARY AFFIDAVIT” DEMONSTRATING DEFENDANT IS NOT IN THE MILITARY IS A VALID GROUND FOR DENYING A MOTION TO ENTER A DEFAULT JUDGMENT, IT IS NOT A GROUND FOR VACATING A DEFAULT JUDGMENT UNLESS THE DEFENDANT DEMONSTRATES HE OR SHE WAS, IN FACT, IN THE MILITARY (SECOND DEPT). ​
Supreme Court Should Not Have Denied Motion to Set Aside a Stipulation of Settlement Without a Hearing, Criteria Explained/Lower Court Properly Considered Issues Raised for the First Time in Plaintiff’s Reply Papers Because Defendant Availed Himself of the Opportunity to Oppose the Contentions at Oral Argument

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...