Frequently Asked Questions
a) What is a proof of claim and why is it important?
A bankruptcy proof of claim form is a document that a creditor files with the bankruptcy court to request payment from a debtor who has filed for bankruptcy. The proof of claim form informs the bankruptcy trustee of the type of claim and the amount owed to the creditor. Creditors should file a proof of claim to have a chance to recoup some or all of what they are owed.
A proof of claim must be filed with the court using the court mandated form found here. The proof of claim must be supported by evidence of the debt owed to you (e.g. a bill of sale). The Trustee will examine the filed proofs of claim and decide whether to object or allow them. If allowed, you will be paid either in full or a proportionate share depending on how much money Trustee is able to obtain and preserve for the benefit of creditors like you. If the Trustee objects to your proof of claim, you will be notified of the objection and the basis for it, and it will be your obligation to respond to the objection. Consulting an attorney to ensure that your proof of claim is filled out and filed correctly is advisable. Dinsmore & Shohl LLP cannot provide legal advice to individual creditors.
b) What is the Chapter 7 Trustee’s role in the bankruptcy case?
The chapter 7 Trustee is responsible for many aspects of the case. From a creditor’s point of view, the Trustee’s primary responsibility and goal is to obtain and preserve as much money for creditors as possible. This includes investigating claims that Pirch may have against others and, when necessary, file lawsuits to recover funds owed to Pirch so that those funds may be distributed to creditors. Trustee is also responsible for analyzing the proofs of claim filed by creditors to ensure that only valid claims against Pirch are allowed.
c) What is the Creditors Committee’s role in the bankruptcy case?
The Unsecured Creditors Committee monitors the events in the case, and when necessary or advantageous to the interests of the unsecured creditors, can either recommend a course of action to the Trustee, or can even take action in the case itself on behalf of the creditors.
d) Do I need a lawyer?
Dinsmore & Shohl LLP represents only the Creditors Committee, not any individual creditor. Dinsmore & Shohl LLP, therefore, cannot give any legal advice to any individual creditor, and nothing here or on this website should be construed as legal advice from Dinsmore & Shohl LLP. You should retain your own counsel to assist you with taking any action within this bankruptcy case, including but not limited to, filing a proof of claim or an amended proof of claim.
e) What if I have not filed a proof of claim yet?
The deadline to file a proof of claim was August 29, 2024. However, if you did not file a proof of claim, you may wish to file a proof of claim as soon as possible, accompanied by a statement explaining why the proof of claim was not filed before the deadline. The statement should be prominently presented so that Trustee may evaluate whether the proof of claim should be allowed despite being untimely.
f) What is the difference between a secured and unsecured claim?
A secured claim in bankruptcy is a debt that is guaranteed (i.e. secured) by collateral, or property, that the debtor pledges to the creditor. Secured claims are paid before other claims in bankruptcy. The collateral can be any type of property, including real estate, business inventory, or personal goods. By contrast, an unsecured claim is a request for payment from a creditor to the bankruptcy court when the creditor does not have the right to sell the debtor's property to satisfy the debt. Unsecured claims are based on a promise to pay, but there is no collateral pledged or created by law. The Unsecured Creditors Committee represents creditors falling into the latter category.
g) What is limited priority claim status?
Limited priority claim status allows at least a portion of a creditor’s claim to be paid before other creditors. The priority of payments often dictates what creditors will recover from a bankruptcy case. Priority status may be claimed, if applicable, on the proof of claim form: part 2, question 12.
h) How and why should I amend my proof of claim?
Generally, you amend a proof of claim to update with new information or to correct an error. You may also amend a proof of claim if you wish to assert that your claim is entitled to priority status. To amend a proof of claim, simply file a new proof of claim form with part 1, question 4 checked “yes”. Provide the number assigned to your original proof of claim in the space provided. Then fill the out the rest of the form. An attorney can advise on exactly how to do this.
i) What happens at a town hall meeting?
At the town hall meetings, Trustee provides general case updates and takes questions from creditors. Any creditor may join the town hall meeting. The next town hall is set for March 12 at 11:00AM (PST) via ZOOM. Meeting ID: 737 172 7291, PASSWORD 464908 (no prior registration required).
j) Will there be any money available to pay unsecured claims?
Trustee’s goal is to preserve as much money as possible to be distributed to unsecured creditors. At this time, the Creditors Committee is unable to make representations as to what will be available for distribution to unsecured creditors, but Trustee will be able to provide an update at the upcoming town hall meetings.