Do the advancement rights of directors and officers have priority over the rights of creditors to the assets of a limited liability company in receivership? In two recent Delaware Court of Chancery decisions ' Andrikopoulos v.
Advancement Claims Not Entitled to Priority in LLC Receivership
In two recent Delaware Court of Chancery decisions, Vice Chancellors Donald F. Parsons Jr. and Sam Glasscock III both concluded that the claims for advancement were not entitled to priority treatment as administrative expenses of the receivership. The cases underscore the importance of obtaining D&O liability insurance regardless of the existence of advancement and indemnification provisions in the entity's organizational documents or the party's employment agreement.
By
Barry M. Klayman And Mark E. FelgerThis premium content is locked for The Bankruptcy Strategist subscribers only
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