Directors and officers insurers backdating claims face


15-Dec-2017 00:29

Expanded Duties, With Some Or No Opportunity To Limit Liability First, the duties of directors and officers are expanded to include fiduciary duties to the company's creditors as well as to the company and its shareholders. In fact, some courts have held that the company's duties to its creditor Instead, creditors may protect their interests by bringing derivative claims on behalf of the insolvent corporation and any other direct non-fiduciary claim that may be available to individual creditors.

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This will in turn positively influence the survival rate and success of more businesses, which are able to experience true scaling and later stage funding opportunities.To help businesses better understand the level of risk their directors and officers face, BHS has developed this Directors and Officers Liability Scorecard.Instructions: Please note that each section will have its own instructions related to scoring. After you have completed all of the sections to the best of your ability, add up your score and determine your level of risk by utilizing the chart at the end of this document.But, with a corporation's filing for bankruptcy protection, the game can change in material respects.

In particular, the playing field can include challenges for directors and officers such as expanded duties, some or no opportunity to limit liability, burdens associated with establishing the allowance of claims for advancement or indemnification and establishing the priority of those claims, and no or limited access to D&O insurance and the policy's proceeds. This perspective overlooks the fact that the plaintiffs in D&O claim include a much broader array of claimants than just shareholders.