When a Non-Executory Insurance Policy Is Assumed: A Case Study
The March 2015 edition of the ABI Journal includes an article written by Douglas N. Candeub. The article analyzes the outcome in In re East West Resort Development V. LP, a recent Delaware Bankruptcy Court decision, where the claimant seeking to recover from the debtors’ available liability insurance was, surprisingly, held obligated to pay for the covered litigation expenses that the debtors incurred in litigating against that claimant. Doug examines the background to the opinion, and highlights the acute level of attentiveness that may be required of creditors in a bankruptcy case that have claims covered by insurance, especially where the insurance policy should not be treated as an “executory contract” under the Bankruptcy Code.
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