The court granted Carbon Health authority for its D&O insurer to advance covered defense costs for certain individuals and modified the automatic stay as needed to permit those payments. Under the D&O Insurance OrderDkt. 455, insurance-funded defense costs for the investigation are capped at $300,000 through May 29, 2026, unless the court later authorizes an increase.
If insurance proceeds are not timely available after commercially reasonable efforts, the debtors may pay actual and necessary defense costs subject to the same $300,000 budget. Counsel must provide monthly fee reports to the debtors, committee, DIP agent, and U.S. Trustee. The order preserves estate liquidity controls while allowing defense work to proceed during an active investigation, and it creates a near-term funding cap and reporting channel for the principal constituency groups.
