Description
Gain the tools needed to make the buying or selling of claims as safe and efficient as possible.As the number of bankruptcy cases increase, creditors owed money by debtors will need to file claims in order to collect at least part of what they are owed. The amount recovered by creditors can range from 0.00 to a 100 recovery, although a typical dividend in a bankruptcy is a small fraction of the total claim. The process of buying and selling claims in bankruptcy can serve several purposes, both for sellers and buyers. This topic will give a brief overview of the bankruptcy process in general and explain the process of selling claims, the requirements for doing so, and some of the main advantagesdisadvantages of claims selling. The material will also address some of the reasons that claims are bought and sold and their impact on bankruptcy cases. The information will also cover some tools for parties that are buying or selling claims to assist in making the process as safe and efficient as possible. This topic will be very helpful for those considering whether to sell or buy claims in bankruptcy cases.
Date: 2021-09-14 Start Time: End Time:
Learning Objectives
Basics of Bankruptcy
• Chapter 7, 11, 12, and 13 and Subchapter V
Proofs of Claim
• Deadlines (Under Bankruptcy Rule 3002)
• Documentation Required (Under Bankruptcy Rule 3001)
• Objections to Claims
• Consent to Jurisdiction • Stern vs. Marshall
• Fraudulent Transfers (Granfinanciera)
• Preferences
Distributions in Bankruptcy Cases
• Time for Distribution in Chapter 7, 11, 12, and 13 and Subchapter V
Purchase of Claims
• Documentation (Under Bankruptcy Rule 3001)
Purpose of Purchase
• Realize on Distribution (Spread Between Purchase and Distribution Amounts)
• Control Class Voting to Either Takeover Debtor or Propose Own Plan for Higher Distribution
• To Obtain Standing to Object to Sale (Family Christian Case)
Pitfalls of Purchase
• Subject to Avoidance Actions
• Subject to Claims by Debtor for Damages/Counterclaims/Objections to Claims
Purchaser Protections
• Build Into Purchase Agreement Clawbacks From Seller/Creditor to Recover Any Amounts Needed to Be Returned, Plus Interest and Attorney Fees
• Indemnification and Reimbursement of All Costs, Expenses, Attorney Fees Incurred With Interest
• Reassign Claim to Seller
• However, Seller/Creditor May Itself Be Insolvent and Not Recoverable
Distribution May Be Delayed for Years in Certain Cases
• Distribution May Be Substantially Less Than What Was Originally Contemplated
• Seller May Want to Realize Partial Return on Claim and Not Concern Itself With Monitoring Case in Future
• Chapter 11 Debtor Plan May Fail Before Any Distribution to Unsecured Creditors
CLE (Please check the Detailed Credit Information page for states that have already been approved) ,Additional credit may be available upon request. Contact Lorman at 866-352-9540 for further information.
Michael A. Fleming-Plunkett Cooney, P.C., David A. Lerner – Plunkett Cooney, P.C.
