Claims and Claims Litigation

• Author: By Eric C. Peterson and Ryan Hardy
• Pages: 159-174

159

A “claim” in bankruptcy is a right to payment. A claim arises whether or

not the right to payment has been reduced to judgment, is liquidated,

remains unliquidated, is xed or contingent, is matured or unmatured,

is disputed or undisputed, is legal or equitable, or secured or unse-

cured. A claim also exists where there exists a right to an equitable

remedy for breach of performance, if such breach gives rise to a right

to payment.1

In any bankruptcy case, a creditor’s claim can only be paid if it is

“allowed.” An allowed claim is a claim, proof of which is led with the

court, and to which no objection has been sustained by the court.2

In Chapter 11 bankruptcy cases, an allowed claim can also arise where

the debtor-in-possession includes the claim within its bankruptcy sched-

ules, on le with the court, if those schedules do not indicate the claim

is in dispute, is somehow contingent, or remains unliquidated (meaning

the actual amount due and owing is unknown).3

As a rule of thumb, all creditors should le proofs of claim. This is

true regardless of whether or not the debtor includes the claim in the

debtor’s bankruptcy schedules. However, there are exceptions to this

general principle. One exception may arise where a creditor does not

wish to waive its jury trial right or submit contract or liability issues to

bankruptcy court jurisdiction.4

Federal Rule of Bankruptcy Procedure 3001 governs the form and

content of a properly prepared and led proof of claim. Ofcial Form 410

is the approved proof of claim form used in bankruptcy cases and con-

forms to Federal Rule of Bankruptcy Procedure 3001. The form meets

the following requirements: (1) that claims be in writing and set forth the

claim amount; (2) that the claim be properly executed by the creditor;

1. 11 U.S.C. § 101(5).

2. 11 U.S.C. § 502(a).

3. Fed. R. Bankr. P. 3003(b)(1).

4. This will be discussed in more depth below.

Claims and Claims litigation

By Eric C. Peterson and Ryan Hardy 7

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160 Chapter 7

and (3) that documentation supporting the claim to be attached. Form 410 also

enables creditors to indicate the type of claim (secured, unsecured, priority,

nonpriority), the type and nature of any collateral securing the claim, priority

treatment to which the creditor’s claim may be entitled, and the component

parts of the claim (e.g., principal, interest, fees, expenses, charges), and pro-

vides instruction for particular required attachments.5

There are categories of claims for which Form 410 may not be appropriate.

Those categories are discussed in Sections III.C and III.E. Among them are so-

called “administrative expense” claims, which may require something more

involved than Form 410. Administrative claims arising from postpetition trans-

actions, for instance, require a creditor to le with the court an application for

allowance and payment.

I. THE PROOF OF CLAIM

As noted above, in order to assert a prepetition claim in bankruptcy a creditor

must le a “proof of claim.”

A. THE CLAIM FORM

The Ofcial Form 410 is the proof of claim form. A reproduction of Ofcial Form

410 can be found at the end of this chapter. Creditors can generally get Form

410 in electronic format from the website of the bankruptcy court where a given

case is pending.6

B. REQUIRED ATTACHMENTS

Ofcial Form 410 comes with instructions. The instructions direct creditors to

include with their proofs of claim such things as statements itemizing principal,

interest, fees, and other charges such as would normally appear in an invoice or

billing statement, together with copies of documents (like contracts) supporting

the claim, and any documents showing the perfection of a security interest in

collateral securing the claim. Bank account numbers, social security numbers,

health care information, and other condential data should always be redacted

prior to the ling of a proof of claim.7

5. The vast majority of bankruptcy claims are asserted using Form 410. Form 410 is designed

so that non lawyers will generally have little trouble completing and ling common types of claims.

6. Form 410 is available at http://www.uscourts.gov/sites/default/les/form_b_410_16.pdf (last

visited Feb. 7, 2018).

7. For further information regarding what must be attached to a proof of claim, see, Fed. R. Bankr.

P. 3001.

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