Professionals or other individuals with a fiduciary obligation in connection with the liquidation of an entity often face conflicting demands. While they are obligated to ensure that assets sufficient to satisfy all actual and potential liabilities are retained, they also often face pressure from the stakeholders or beneficiaries in the liquidating entity to release the entity’s net assets as quickly as possible. In addition, the costs of continuing to operate the liquidating entity and complying with reporting requirements, whether to the relevant stakeholders or beneficiaries or to others, can all serve to deplete the net assets available for final distribution when the liquidation is completed.
Ambridge’s Transactional Insurance products can provide protection for the professionals or other individuals with a fiduciary responsibility that are undertaking the liquidation of an entity, whether it be a liquidator, or a trustee, or the managers of a fund, or other fiduciary. The products can also assist in accelerating the time-frame during which a liquidation can be completed by providing insurance to remove a provision or reserve that was required to be made for any identified exposure(s) or to provide the responsible professional or individuals with fiduciary responsibility with the comfort that all unknown potential exposures that may crystallize in the future have been provided for through insurance, or a combination of both. Finally, the products can provide protection to the stakeholders or beneficiaries of the liquidating entity against the risk that proceeds distributed to them will be “clawed back” as an improper distribution.