Available in:

OnDemand Course
MP3 Download

Purchase of Claims in Bankruptcy: Profits and Pitfalls

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 advantages/disadvantages 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.

59 minutes
Course Exam
Certificate of Completion
Purchase Options

More Program Information

Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

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
Purchase Options

More Program Information

Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on September 14, 2021.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

  • Arizona CLE 1.0
     
  • CA MCLE 1.0
     
  • CT CLE 1.0
     
  • HI CLE 1.0
     
  • NJ CLE 1.2
     
  • NY CLE 1.0 including Areas of Professional Practice 1
     
  • VT CLE 1.0
     
  • WA CLE 1.0
     
  • WV MCLE 1.2
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

Purchase Options

More Program Information

Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Michael A. Fleming

Michael A. Fleming

Plunkett Cooney, P.C.

  • Partner in Plunkett Cooney, P.C.’s Banking, Bankruptcy and Creditor Rights Practice Group who has represented creditors in bankruptcy for over 35 years
  • Represents clients in numerous aspects of commercial and secured transactions, including loan workouts, foreclosures and commercial loan collections, as well as business reorganizations and creditors' rights as well as business bankruptcy reorganizations
  • Named a Best Lawyer in America for bankruptcy and creditor debtor rights every year since 2015 and has achieved the highest rating in the Martindale-Hubbell Law Directory
  • Member of Turnaround Management Association and American Bankruptcy Institute
  • J.D. degree, cum laude, Wayne State University Law School; B.A. degree, magna cum laude, University of Michigan-Dearborn
  • Can be contacted at 248-901-4095 or [email protected]
David A. Lerner

David A. Lerner

Plunkett Cooney, P.C.

  • Partner at Plunkett Cooney, P.C. in Michigan
  • Currently represent banks and other creditors, as well as insurance companies, Universities, individual creditors in bankruptcy and receivership cases
  • Prior practice in Dallas Texas in the 1980s
  • Member of the American Bankruptcy Institute, co-chair of the Federal Bar bankruptcy committee, co-chair of the 6th Circuit bankruptcy moot court competition, frequent speaker at seminars throughout Michigan and through ALFA
  • Notable cases include a steel mill in West Virginia with 100% distribution to creditors, represented an Indian Tribe in the Greektown bankruptcy, represented a thoroughbred horse fam and oil and gas operations in Texas, represented unsecured creditor committee in largest mortgage fraud case in Michigan
  • Admitted to practice in New York, Texas, and Michigan
  • J.D. degree, Syracuse University; undergraduate degrees, University of Cincinnati
Purchase Options

More Program Information

Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

All of your training, right here at Lorman.

Pay once and get a full year of unlimited training in any format, any time!


  • OnDemand Courses
  • Live Webinars
  • MP3 Downloads
  • Course Manuals
  • Executive Reports
  • White Papers and Articles

Additional benefits include:

  • State Specific Credit Tracker
  • All-Access Pass Course Concierge

Questions? Call 877-296-2169 to speak with a real person.

Sign Up Today
With This Course

Access to all training products for one year
$699/year

Unlimited Lorman Training

With the All-Access Pass there is no guessing what you will need for your yearly training budget. $699 will cover all of your training needs for an entire year!

Easy Registrations

Once you purchase your All-Access Pass you will never be any further than one-click away from attending any Lorman training course.

Invest in Yourself

You haven't gotten to where you are professionally by luck alone; it's taken a lot of hard work and training. Invest in yourself with the All-Access Pass.

Product ID: 408951
Published 2021
Purchase Options

Available in Multiple Formats

Purchase this course and learn on your schedule!