The June edition of the American Bankruptcy Institute Journal has published an article written by Timothy Duggan, a fellow Stark & Stark attorney. Tim is the Chair of the Firm’s Bankruptcy and Creditor’s Rights group.
His article, Informal Proof of Claim: Form or Substance? (PDF) discusses a recent Third Circuit decision in which the Court clarified the boundaries surrounding the filing of informal proofs of claim. I thought this article would be of interest to the injury lawyers who read this blog and sometimes find themselves in a situation where their client has a claim against a company who files for bankruptcy protection.
Here is an excerpt of Tim’s article:
A seaman was injured while working for a company that owned and operated a riverboat known as the Delta Queen. After advising the company of his claim, the seaman hired a lawyer, who sent a written notice of the claim to the company. Four months later, the company filed for chapter 11 protection.
The bankruptcy clerk mailed a notice of the commencement of the bankruptcy case to all creditors that advised them to file their proof of claims with the court-appointed claims agent. The seaman’s lawyer received the notice and sent a letter to the claims agent requesting a proof-of-claim form and advising the claims agent that the seaman was injured on the Delta Queen and “has a claim against the debtor.”
The next month, the claims agent sent the seaman and his lawyer a copy of the notice setting the bar date to file a proof of claim and a proof of claim form. Neither the seaman nor his lawyer filed a proof of claim. Rather, three months after the bar date passed, the seaman’slawyer filed a motion for stay relief to pursue the claim under the Jones Act. Debtor’s counsel opposed the motion, arguing that the stay should not be lifted because the claim was barred. The seaman’s attorney immediately filed a motion to enlarge the time to file a proof of claim and, in the alternative, argued that his prior letter to the claims agent constituted an informal proof of claim. The bankruptcy court denied both motions, and the U.S. District Court affirmed on appeal.