2020-10-20_GENERAL DOCUMENTS - C1980004 (3)

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Case 1:20-bk-12043 Doc 466 Filed 10/09/20 Entered 10/09/20 14:25:40 Desc Main Document Page 3 of 9 advancement — not indemnification — and the additional fees and expenses that Hughs is now incurring to chase down Royal and Debtor Rhino to recoup these losses certainly fall within the former category), the mere fact that the proceeds of the D&O Insurance Policy are Estate property does not control here for several reasons. The issue on this motion is whether the Automatic Stay should be lifted to allow Hughs to make a claim to which the D&O Insurance Policy would respond and the UCC offers no reason to refuse to allow Hughs to make that claim. a. First, the UCC's assertion that Hughs, "laid out a roadmap for the Committee or a trustee," to make a claim against the D&O Insurance Policy, that such parties may soon make claims against the policy, and that Hughs' argument that there is currently no evidence in the record of any benefit being provided to the Debtor's estate is "speculative" is itself disingenuous and speculative. Hughs seeks to make a claim based on his rights under the Bylaws and LP Agreement. No other party — not the Debtor, nor the UCC — has sought to make a claim. These are the facts before the Court. The UCC's supposition that a claim may soon be made by some unknown, unnamed person is entirely speculative. Nor has the UCC demonstrated, based on the facts in the record, that the D&O Insurance Policy is currently providing a palpable benefit to the Estate. See In re First Cent. Financial Corp., 238 B.R. 9, 19 (Bankr. E.D.N.Y. 1999). Indeed, Debtors have now moved this Court to convert their Chapter 11 case to a Chapter 7 liquidation. See Dkt. No. 436. In light of this request, the rationale underlying the UCC's argument is even weaker: to the extent that Debtor or any other yet -unknown -party seeks to make a claim against the D&O Insurance Policy, it will not be for any ongoing benefit 3