The Handling of Proofs of Claim in “Claims Agent” Cases
Kenneth M. Freda and Craig Johnson
Garden City Group Inc.; Melville, N.Y.
Handling and processing proofs of claim is vital to any chapter 11 case. Together with the chapter 11 debtor’s scheduled liabilities, proofs of claim establish the debtor’s potential exposure to its creditors. For pre-petition creditors, proofs of claim offer the only opportunity to assert their claim in the chapter 11 case. Failing to account for a timely-filed proof of claim can significantly harm a debtor by introducing a previously unknown liability (or a liability in an amount greater than, or a classification different than, that reflected in its schedules) at an inopportune time. Likewise, if a pre-petition creditor’s liability is unscheduled (or is scheduled in an amount less than, and/or with a classification of a lesser priority than, the creditor is actually entitled) and the creditor fails to timely file a proof of claim, that creditor will likely lose any right to receive a distribution under the reorganization plan (or will receive a distribution based on the incorrect scheduled amount and/or classification). Accordingly, the manner in which proofs of claim are processed may have significant bearing on the outcome of a case.
Minutes from the 2006 Winter Leadership Conference
The Court Administration Committee held a joint meeting with the Legislation Committee on Friday morning, Dec. 1, 2006. Co-Chair Lynn Tavenner (Tavenner & Beran PLC) represented the Court Administration Committee and Co-Chair R. Scott Williams (Haskell Slaughter Young & Rediker LLC) represented the Legislation Committee.
The panel discussion was jointly led by Hon. James D. Gregg (U.S. Bankruptcy Court; Grand Rapids, Mich.), Mr. Williams and Ms. Tavenner.
The discussion began with a presentation on the historical and statutory background related to the appointment of judgeships. The interactive dialogue then focused on the current process of the appointment of bankruptcy judgeships and related practical considerations, followed by the proposed revisions to the Bankruptcy Rules and the need for input from bankruptcy practitioners. The panel also addressed the Rules survey that was conducted by the ABI Bankruptcy Rules Task Force; the final result can be accessed at www.abiworld.org/Rules_CommentsFinal.pdf
The meeting ended with an open discussion with participants concerning changes expected in the new Congress and upcoming legislative priorities.