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The principles underlying the treatment of Preferential Transfers and getting the money back under the Bankruptcy Code, as outlined in an excellent new article, seem to be very similar to the Equitable Doctrines of Recoupment and Exoneration: See J. Henk Taylor & Justin Henderson, "Preferences/When Can a Trustee Claw Back Payments to Creditors?" 19 Business Law Today 60 (American Bar Association, Business Law Section, March/April 2010).
A question arises, then: Is the repayment of an established Preferential Transfer under the Bankruptcy Code a Covered "Loss" under Director's and Officer's Liability Insurance Coverage, or is it instead in the nature of a penalty for restitution which, it has been held, is not a covered "Loss" under a D&O Policy? See, e.g., the post on Insurance Claims and Issues on March 10, 2010.
"Reimbursement and Exoneration" are the featured topics of Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" ยง 7:18 (Second Edition Shepard's/McGraw-Hill; 2009 Supplement West Publishing Company).
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