Delta Financial Corp. v. Westchester Surplus Lines Insurance (In Re Delta Financial Corp.)

OPINION

SONTCHI, Bankruptcy Judge.

INTRODUCTION

This is an action for a declaratory judgment that the defendants are required to provide insurance coverage to the debtors and certain of the debtors’ officers and directors for defense costs and indemnification in connection with a pending state court action.

Delta Financial Corporation, the lead Chapter 11 debtor in the underlying bankruptcy cases, and certain of its officers and directors were sued pre-petition in New York state court. The plaintiff in the state court action asserts a number of claims arising from a 2001 restructuring…