2008 International Conference Golden Opportunities or Fool’s Gold? November 5-7, 2008 San Francisco Skating On Thin Ice: The Risks of Insuring Failing Businesses

MODERATOR: Joe Kingma, Esq., Partner, Carlock Copeland Semler & Stair PANELISTS: Kenneth Coffin, JD, Esq., Vice President, Professional Liability Claims, Liberty International Underwriters Kenneth N. Klee, Esq., Partner, Klee, Tuchin, Bogdanoff & Stern, LLP; Professor, UCLA School of Law Ronald Klein, JD, CFE, Vice President, Claims Counsel, CAMICO Mutual Insurance Company Richard Levine, Esq., Chair, Bankruptcy & Insolvency Practice Group, Nelson Kinder Mosseau & Saturley PC Skating on Thin Ice: Risks of Insuring Failing Businesses

Overview Prologue: Professional Liability in Bankruptcy or Cracks Appear in the Ice Act I: Mediation or Treading Water in the Frozen Lake Act II: Throwing You a Lifeline –Takeaway Points –Questions and Answers

Cast of Characters Ken Klee - Embattled Mediator and Introduction Rick Levine - Counsel for the Plaintiff Trustee Joe Kingma - Counsel for Defendant Accountant, Addemup Ron Klein - Vice President, Accounting Claims – Unlucky Insurance Ken Coffin - Vice President, Attorney Claims - Unlucky Insurance

Prologue Ken Klee

Professional Liability in Bankruptcy Breach of Fiduciary Duty Aiding and Abetting Breach of Duty Deepening Insolvency Malpractice

Deepening Insolvency Cause of Action Measure of Damages A Nullity Choice of Law Who Has Standing to Assert In Pari Delicto Defense

Equitable Defense Based on Unclean Hands Applies Unless an Exception Negates it –Adverse interest exception Sole actor exception to exception –Innocent decision-maker exception –Control person exception –Assignment of creditor actions to trustee

Act I Treading Water in the Frozen Lake or Mediation of the Trustee’s Claims Against Accountants and Lawyers

Scene 1 Rick Levine, Counsel for the Plaintiff Trustee, Gives His Opening Statement at Mediation

Scene 2 Joe Kingma, Counsel for the Accounting Defendant Addemup, Gives his Opening Statement

Scene 3 Ron Klein (Accountants) and Ken Coffin (Attorneys) of Unlucky Insurance Meet Privately

Scene 4 Mediator Ken Klee, Meets with Rick Levine, Counsel for the Plaintiff Trustee, in a Private Session

Scene 5 Mediator Ken Klee, Meets with Joe Kingma, Counsel for the Accounting Defendant Addemup

Scene 6 Mediator Ken Klee, Meets with Unlucky Insurance Representatives Ron Klein and Ken Coffin and Makes One Last Effort to Open Their Wallets

Act II Throwing You A Lifeline

Takeaway Points From Ken Klee

Takeaway Points From Rick Levine

Takeaway Points From Ron Klein

Takeaway Points From Ken Coffin

Takeaway Points From Joe Kingma

Joe’s Takeaway Points I Underwriters - Watch for Failing Business Exposures Professionals Whose Client Base Includes: A.Homebuilders and Developers B.Auto Industry Suppliers C.Retailers D.Lenders to A-C Take Deepening Insolvency Claims Seriously SOL Order for Relief Plus 2 Years (11USC108)

Joe’s Takeaway Points II Check Local Rule on Withdrawing Reference Under 28 USC§157(d) Proof of Claim Keeps you in BK Court Watch Out for 2004 Examinations Trustees, Chief Restructuring Officers, and Receivers Check Pacer for : –Special Litigation Counsel –Value of Claim –Assets to Prosecute

Questions & Answers

Many Thanks to Joe Kingma, Esq. Kenneth Coffin, JD, Esq. Kenneth N. Klee, Esq. Ronald Klein, JD, CFE Richard Levine, Esq.