Claims Transfer Notice Requirements and Restrictions

Summary

This practice note covers the notice requirements for transferring claims in a bankruptcy case and restrictions on claims trading. Any purchaser of claims against a person or entity in bankruptcy will need to address two fundamental questions. One is—how do I notify the debtor and the court that I now hold a claim against the debtor? The second is—what do I have to disclose in order to ensure that my claim is allowed and I am not subject to future inquiry? This practice note addresses these questions. Claim purchasers also need to be aware of the various restrictions on claims trading, including, among others, restrictions contained in lock-up agreements, trade restrictions on committee members, and restrictions to protect the debtor's net operating losses (as discussed in this practice note).