To view Covering Your Tail: Court Approves Advancement of Legal Fees to Directors and Officers under §363, written by Robert J. Dehney and Curtis S. Miller, please click here.

Article Introduction: 

In a bench ruling on June 30, 2006, the U.S. Bankruptcy Court for the District of Delaware in In re RNI Wind Down Corp., Case No. 06-10110 (Bankr. D. Del. Filed Feb. 7, 2006), approved the debtors’ advancement of legal fees and expenses to current and former officers, directors and employees who were the target of an investigation undertaken by the Official Committee of Equity Securities-Holders (EC). This appears to be a case of first impression where a court authorized, over objection, a debtor’s advancement of legal fees and expenses pursuant to 11 U.S.C. §363 to directors and officers during the pendency of a case.