Proof of Claim

A proof of claim is the form a creditor files in a bankruptcy case to state what the bankrupt company owes it and why. In asbestos bankruptcies, most injured people do not file one in the court; their claims are channeled to an asbestos trust, which has its own claim forms and procedures.

Origin

Proofs of claim are a standard part of U.S. bankruptcy procedure under the Bankruptcy Code and Rules, usually due by a deadline called the bar date. In Chapter 11 cases resolved under Section 524(g), current and future asbestos personal injury claims are sent to a trust rather than paid through the ordinary claims process.

Significance in Asbestos Context

People sometimes hear that a company has filed bankruptcy and worry they missed a proof-of-claim deadline. For asbestos personal injury claims in a 524(g) case, the usual route is a trust claim filed after the trust opens, under the trust distribution procedures. Some bankruptcy courts have set deadlines or required filings from asbestos claimants for voting or other purposes, so notices from a bankruptcy court should not be ignored. Property damage claims, such as building owners' claims, and claims against companies that did not use 524(g) may follow different rules. A lawyer familiar with asbestos bankruptcies can tell whether any filing is needed while a case is pending.

Example Sentence

The notice from the bankruptcy court explained that asbestos injury claimants did not need to file a proof of claim, because their claims would be handled by the trust.

Related Terms

Bar Date, Chapter 11, 524(g) Trust, Bankruptcy Trust Claim, Trust Distribution Procedures, Plan of Reorganization

Notes

• Do not ignore mail from a bankruptcy court; give it to your lawyer.
• Trust claims are filed with each trust after it opens, not in the bankruptcy court.