Laserfiche WebLink
Case 1:20-bk-12043 Doc 453 Filed 10/06/20 Entered 10/06/20 15:26:47 Desc Main <br />Document Page 6 of 9 <br />added).") This coverage does not serve to pay Loss on behalf of an Insured Person like Mr. <br />Hughs.' For the purposes of this coverage part, the Policy is akin to the first example cited in Arter <br />& Hadden, where the Debtors are the only beneficiaries, and the proceeds of the policy are property <br />of the estate. <br />17. Furthermore, courts find that proceeds of D&O policies are property of the estate <br />where the estate is worth more with them than without them. In re CyberMedica, Inc., 280 B.R. <br />12, 17 (Bankr. D. Mass. 2002) (finding D&O insurance proceeds to be property of the estate even <br />where there was direct coverage to the directors and officers). Despite Mr. Hughs' apparent belief <br />that the Debtors will not make any claims against the Policy, or that the Policy is "not currently <br />providing any palpable benefit" to the estates, his assertions are wholly speculative at this time. <br />Doc. 429 at ¶¶ 42, 44. Indeed, the Committee has identified various questionable insider <br />transactions that may result in claims against covered parties and implicate the Policy. Mr. Hughs <br />has done the same and laid out a roadmap for the Committee or a trustee to do so. <br />18. Relying on Mr. Hughs' recitation of the facts, it is not speculative to anticipate these <br />claims being brought by other entities, such as the Committee or a future trustee. Preservation of <br />the proceeds for the benefit of creditors is critical, because it is one of the only sources of potential <br />recovery for unsecured creditors in this case. This fact puts the Policy squarely within the third <br />example set forth in Arter & Hadden, meaning the proceeds belong to the Estate. <br />19. None of the cases cited by Mr. Hughs, including Arter & Hadden, Allied Digital, <br />and CyberMedica are applicable here, because all involve claims under coverages which provided <br />direct benefits to the directors and officers. On the facts alleged here, Mr. Hughs cannot make any <br />direct claim against the policy, and any proceeds which are payable under the Policies should go <br />'The Policy defines "Insured Person" to be natural persons (such as Mr. Hughs) who are insured under the Policy and <br />distinguishes `Insured Person" from the Company. Policy § (H)(J). <br />