Large Claims on Claims Register – Got Info?

This post isn’t to be construed as “questioning the validity” of specific proofs of claim – this is an area that the US Trustee and the bankruptcy court will deal with eventually.

But I’ve notice some large claims recently in the claims register – wondering if any of our ex-Hellerites might have some background info on them:

Smith & Williamson
25 Moorgate
London EC2R 6AY – United Kingdom
Amount: $11,767,289.00

Pension Benefit Guaranty Corporation
Attn: Marc S. Pfeuffer, Attorney
Office of the General Counsel
1200 K Street, N.W. Suite 340
Washington, DC  2005-4026
Amount: $971,250.00 and $802,500.00

Grew, Christopher A.
27 Duncan Terrace
London N1 8HQ
England
Amount: $2,113,508.00

City of New York
Department of Finance
Martha E. Stark, Commissioner
345 Adams Street
Brooklyn, NY  11201
Amount: $4,909,865.00

Robert Badal
350 S. Grand Ave. #2100
Los Angeles, CA  90071
Amount:  $2,275,000.00

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29 Responses to “Large Claims on Claims Register – Got Info?”


  1. 1 John Doe 23 April 2009 at 11:17 am

    You might want to also explain how all of the Blum Collins plaintiffs can have priority claims in excess of $10,950. $10,950 is the cap unless one of the exceptions apply, none of which do.

  2. 2 Former Associate 23 April 2009 at 12:07 pm

    IT appears to be based on a “contribution to employee benefit plan,” though I don’t know how they get the number to be as high as it is.

  3. 3 Former Associate 23 April 2009 at 12:09 pm

    Badal’s claim appears to be based on a written contract he supposedly had with the firm for $1.375M per year for 2008 and 2009. He is claiming the balance of ’08 and all of ’09, even though he left and is gainfully employed elsewhere. His filing vaguely admits the possibility that his claim may need to be reduced by mitigation efforts. It seems a bit disingenuous to claim comp for ’08 and ’09 when he has been employed elsewhere (presumably for similar comp) that whole time.

  4. 4 Thomas MacEntee 23 April 2009 at 12:17 pm

    The short explanation for why the priority claim is greater than $10,950 is: Former employees may have a priority claim for contributions to employee benefit plans (11 USC § 507(a)(5)) in addition to priority claim for wages (11 USC § 507(a)(4)).

    Thomas

  5. 5 anon2 23 April 2009 at 6:00 pm

    Thomas, did you notice that the latest claims register has it listed as a Chapter 7? Previously it was Chapter 11 – just a typo? FCOL, first Bank of America, now the USBC.

  6. 6 Thomas MacEntee 23 April 2009 at 8:39 pm

    Anon2

    I did notice and I am doing some investigating – it appears that the Claims Register for 09 April 2009 stated Chapter 11 as did the Docket for 13 April 2009 but it changed sometime after that.

    Thomas

  7. 7 Anon2 23 April 2009 at 8:53 pm

    Thomas, thank you for your diligence! Seeing as how the BK court would not allow BofA to have their “do-over”, we certainly don’t want to have a similar situation with our claims! I would assume as long as the claims are listed in the same case number, it should be ok, but who wants to assume anything!? Not me!

  8. 8 anon2 23 April 2009 at 9:31 pm

    HD, it’s me again. Look at the Docket Sheet dated 4/23/09. It states Chap. 7 and NO ASSETS! Wtf? This could get messy(er).

  9. 9 Observer 24 April 2009 at 1:05 am

    This Ch. 7 stuff has to be database glitch at the court.
    The latest filings by the debtor continue to state Ch. 11, etc., etc.
    There is no Ch. 7 here, just a web site phantom of some sort.

  10. 10 Observer 24 April 2009 at 1:15 am

    Considering that these are the last two days for claim filing, I have emailed a creditor committee contact, asking them to immediately ask court staff to straighten out whatever has caused this database mis-indication.

    It is possible, I think, that the volume of claims being filed in these few days is what caused some court staffer to hit a wrong key and cause this to happen. But it certainly needs fixing, and pronto.

  11. 11 Observer 24 April 2009 at 1:50 am

    I believe that HD’s reading of 507(a)(4) and 507(a)(5) is faulty. The two sections together are capped at the maximum priority claim of $10,950.

    Further, the 507(a)(5) priority is available to PLANS, not the employee.
    Try reading 507(a)(5) yourself if you like (available here http://www.law.cornell.edu/uscode/uscode11/usc_sec_11_00000507—-000-.html), but it says employees have their claims up to $10,950, and PLANS have claims for unpaid contributions to the extent that employees priority amounts haven’t used up all of the $10,950’s available in a formula already.

    (It’s not that I care if people overclaim; rather it is that overclaiming is going to cause them to have to suffer through the claim objection process.)

  12. 12 Thomas MacEntee 24 April 2009 at 4:51 am

    I already have people at Blum Collins looking to correct it – it must be a glitch since there is inconsistency on several different filings. We will be contacting the bankruptcy court this morning.

  13. 13 Thomas MacEntee 24 April 2009 at 4:54 am

    Thanks Observer

    I am going to stand by what I’ve posted in the comments before. As I said this is part of the Blum Collins work and being part of the class action via retainer agreement I have faith in their approach.

    Thomas

  14. 14 P-Owed 24 April 2009 at 10:17 am

    Speaking of claims, why hasn’t there been any discussion on Heller’s severance policies? Most employees are entitled to severance payments depending what their length of employment was. Can’t our claims include severance payments in addition to the WARN amounts?
    Please advise. Thanks.

  15. 15 Former Associate 24 April 2009 at 12:06 pm

    This isn’t really the right article, but there is a link to the complaint filed by the Committee seeking to avoid BofA’s UCC statements and recover the $51+Million they recovered since September. This is a critically important event for the rest of us creditors because it will potentially infuse the estate with that $51M and convert the bank into an unsecured creditor like us schmucks, receiving the same diluted recovery we ultimately recover.

  16. 16 Thomas MacEntee 24 April 2009 at 12:08 pm

    I believe I just posted the Unsecured Creditors’ Committee’s complaint in the 4/24/2009 docket section on the Bankruptcy page.

  17. 17 Thomas MacEntee 24 April 2009 at 12:10 pm

    I do have a copy (at home which I will try to post tonite) about severance policies. I was unaware of the policy so that is why it didn’t get included into the proof of claim spreadsheet.

    Also what isn’t clear: were the severance/termination policies different by office and by position (non-exempt, exempt, attorney etc.)?

    Thomas

  18. 18 Observer 24 April 2009 at 5:39 pm

    The court web site has now been fixed. The faulty references to Ch. 7 are gone.

  19. 19 Frustrated 24 April 2009 at 6:10 pm

    I filed my proof of claim and included a priority amount (which exceeded the cap of $10,950). Apparently, you are supposed to subtract the priority amount from the total amount and put the difference in box 1, which I did not do–I put the total amount of my claim just like the Fing form asks you to do!!–and therefore they did not list my priority amount on the claim register. My question is this: Should I amend my form? Does “priority” even mean anything at this point?

  20. 20 anon2 24 April 2009 at 6:31 pm

    Frustrated, I know exactly what you mean. I carefully outlined priority, etc. on mine, too, only the clerk just put it all under unsecured. Perhaps the clerk is not paying clsoe attention.

  21. 21 Thomas MacEntee 24 April 2009 at 6:32 pm

    I don’t read the form that way. I placed the whole amount in Box 1 and the priority portion in Box 5. If you are looking at how the claim amounts are broken out in the the Claims Register, I think that is something that the court calculates. I will check on this to be certain – but anyone else want to weigh in?

    Thomas

  22. 22 Observer 24 April 2009 at 6:39 pm

    The court reflects the info in its claim register according to how the form is filled out. The correct way is to put the total amount of the claim in box 1, check the wages priority item in box 5, and put the priority amount in the line in box 5. If you do it by hand, you can write in any amount on that line in box 5. As far as I can tell, you can also put any number on that line in the online form.

    (I do not recommend putting in any amount larger than $10,950 as priority, and I don’t know if the clerk will reduce it to that regardless of what you put in. I think they just transfer into the data base whatever you put on the form.)

  23. 23 anon2 24 April 2009 at 6:39 pm

    Thomas, I filed an amended Proof of Claim and STILL the clerk entered it all as unsecured with no priority listed, even though I specially entered the total amount in box 1 and the priority amount in box 5. Same with the original. This really ticks me off!

  24. 24 Observer 24 April 2009 at 6:40 pm

    P.S. What the clerk will not do is look at any attachments to determine what you are claiming and in what categories. They go strictly, and literally, from what you put in the correct places on the form.

  25. 25 Jeff Richmond 24 April 2009 at 6:46 pm

    They are just getting a lot of claims, and making a lot of mistakes. I am sure I filled out the form correctly, but the register doesn’t show any priority amount. I don’t think anyone should lose any sleep over this; your proof of claim defines your claim.

  26. 26 Observer 24 April 2009 at 7:03 pm

    Jeff’s comment sounds right to me. There will be many errors in the claim register, but it is the filed claims that count.

  27. 27 anon2 24 April 2009 at 7:04 pm

    Whew, that’s a relief! Thanks!

  28. 28 AnonAssociate 25 April 2009 at 5:32 pm

    Same thing happened to me – my entire claim was listed as unsecured even though I put the total amount in box 1 and priority amount in box 5. I went to the clerk’s office last week, asked what I should do and he told me to file an amended claim with the unsecured amount written into box 4 next to the words “Amount Unsecured” and to leave box 1 and box 5 the same. I did that (even though this seems contrary to the instructions on the form) and the latest claim register now breaks out my priority claim versus unsecured.

  29. 29 Observer 27 April 2009 at 2:29 am

    That is technically inaccurate advice from the person at the clerk’s office. When you don’t have a secured claim, you are not supposed to have to fill out box 4 at all (as Anon above quite correctly reads the instructions).

    But who knows how accurately they are processing a mini-flood of forms at this point.

    (I have avoided all this by e-filing my claim. In that process, I essentially fill out the claims register info myself, and it is merely captured by the database.)


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