(Bankr. E.D. Ky. June 6, 2016)
In these jointly administered cases converted to chapter 7, the bankruptcy court modifies the stay for the limited purpose of paying defense costs from the debtor’s D&O insurance policy to the two individual creditors. The creditors were directors and shareholders of one of the debtors and were named defendants in the trustee’s adversary complaint, which alleged the debtors breached their fiduciary duties to the debtor. The court holds it is premature to make a determination as to whether the policy proceeds are property of the estate. Opinion below.
Attorneys for creditors: Fowler Bell PLLC, Taft A. McKinstry, Matthew D. Ellison
Trustee: Phaedra Spradlin