Claim Transfer Agreement

Summary

This claim transfer agreement template is for use by a party purchasing claims in a bankruptcy case. This template includes practical guidance, drafting notes, optional, and alternate clauses. Bankruptcy Rule 3001(e) provides, among other things, the procedures to be followed when a creditor with a filed proof of claim sells or transfers its claim to another entity. Under the rule, any time that a claim is transferred after a claims bar date, the claim purchaser will need to file a notice of claims transfer. The form notice of claims transfer to use for claims other than for security is Official Form 2100A https://www.uscourts.gov/sites/default/files/form_b2100ab.pdf. The notice form is easy to fill out—it lists the name of the transferor, the name of the transferee, the amount of the claim that is being transferred (it is permissible to transfer less than the full amount of a claim), and the number assigned to the applicable proof of claim filed by the transferor. Bankruptcy Rule 3001(e)(2) also requires the transferee to file evidence of the transfer and requires the clerk to notify the transferor of the transfer. To comply with the rule, the transferee must attach evidence of the transfer to the Bankruptcy Rule 3001(e) notice. This document is sometimes the actual agreement between the parties (i.e., the claims transfer agreement) and other times is a short document titled evidence of transfer. The evidence of transfer is signed by both parties and contains the relevant terms of the transfer needed to comply with the rule. Parties will typically redact the purchase price that the transferee paid for the claim in any Bankruptcy Rule 3001(e) transfer notice. If there is no objection, the rights of the claim holder get transferred and are as if the investor paid full face value for the claim. Note that the claims trading market has developed such that there generally are four types of trades: recourse/put back; non-recourse; escrowed; and "as is." This template is primarily a non-recourse agreement but can be modified to reflect one of the other types of trades. In non-recourse trades, the buyer acquires the claim without recourse against the seller, subject to breaches of representations and warranties and/or subject to rights of indemnity. For an evidence of claim transfer template, see Evidence of Claim Transfer. For more and related information, see: • Claims Transfer Notice Requirements and Restrictions • Claims Trading Basics • Claims Trading Benefits and Risks • Proofs of Claim in Bankruptcy • Amending Claims in Bankruptcy