The International Monetary Fund (IMF) has painted a pessimistic picture for the U.S. economy for the remainder of this year and into 2009. Warren Buffett, the nation's best-known and perhaps most successful investor, has declared that the country's economy is in a recession that may be more severe than most people expected. Recent U.S. Department of Commerce figures indicate that construction spending across the country has slowed when compared with same-period data for 2007. Further adding to the bad economic news are reports that commercial bankruptcies in the United States have soared in 2008, with the nation's small businesses particularly hard hit.
For those of you in the construction and public contracting industries, all of this news means, among other things, that an increasing number of bankruptcy proof-of-claim forms are liable to be making their way into your mailboxes in coming months. Don't dismiss these forms as merely more recyclable junk mail; they represent your foremost chance of recovering any monies from a bankrupt debtor, whether that debtor be an owner, a subcontractor, an equipment lessee or another type of debtor.
A proof of claim is a written document filed by a creditor in a bankruptcy case to substantiate that creditor's claim against the debtor. Although not all creditors are obligated to file proofs of claim to preserve and protect their claims in a bankruptcy case, as a general rule, construction companies and public contractors will find that filing a proof of claim is the best way to maximize recovery against a bankrupt debtor. A properly completed and timely submitted proof of claim will ensure that the bankruptcy court understands the amount of the creditor's claim, the basis of the claim and the type of claim.
The bankruptcy court in which the debtor has sought bankruptcy protection will prescribe the acceptable form of the proof of claim, as well as the filing procedures for the form. Fundamental information required by a proof-of-claim form includes the creditor's name and address, the amount of the creditor's claim, the basis underlying the claim and the type of claim. An unsecured creditor with claims against a debtor generally has to file a proof of claim with the bankruptcy court within 90 days after the first date scheduled for the meeting of creditors under the US Bankruptcy Code.
Proper completion of the proof-of-claim form and timely submission of such form with the bankruptcy court are critical to a creditor's efforts to recover from a bankrupt debtor. Consequently, those of you who receive proof-of-claim forms are strongly encouraged to consult with counsel for further guidance and assistance regarding the proof of claim and the submission process. Peckar & Abramson's Corporate Law Services Group can provide you with the requisite knowledge and expertise to complete and file in a timely manner the proof of claim and thereby enhance recovery on your claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
