What’s the Insured Value of an Allowed Bankruptcy Claim? Pay-as-Allowed, Pay-as-Paid, and a Novel Variation

John E. Heintz and Kyle P. Brinkman

John E. HeintzBrinkman, Kyle P.Bankruptcy of the insured does not relieve an insurer of its obligations under its insurance policy, including to pay covered liability claims held by creditors of the bankruptcy estate. Generally, for a creditor to obtain a distribution from the estate, the creditor must file a timely “proof of claim” in the bankruptcy proceeding, and the claim must be “allowed” by the bankruptcy court. Because a debtor’s assets are typically insufficient to compensate all creditors for the full allowed value of their claims, creditors usually are paid only a fraction of the dollar value allowed. Disputes have, as a result, sometimes arisen between debtor insureds or their successors on the one hand, and their insurers on the other, over whether the insurer is obligated to pay the allowed value of an insured claim (“pay-as-allowed”), or instead only the fractional amount the creditor actually would receive from the estate if there were no insurance coverage (“pay-as-paid”). Continue reading “What’s the Insured Value of an Allowed Bankruptcy Claim? Pay-as-Allowed, Pay-as-Paid, and a Novel Variation”

Insurance Coverage for Government Seizures of Property

John E. Heintz and John A. Gibbons

John E. Heintz John A. GibbonsMany businesses and individuals are familiar with insurance that is available to pay for property that is taken by a private third party, be it a stranger, employee, competing business, or anconfiscate_locked_chain_shutterstock_113300764y other private actor. But what happens when a government entity or official “seizes” property? Businesses may not immediately think of insurance, but a number of forms of insurance may offer protection and reimbursement for the loss of the “seized” or taken property. Continue reading “Insurance Coverage for Government Seizures of Property”