Galloway Secures First Federal Bankruptcy Ruling Delineating The Valuation of Unliquidated Claims Under 11 USC 506

2017 May 25
by GJTBS Admin

Adam Breeze of the St. Louis office of Galloway obtained the first national ruling concerning valuation of an unliquidated claim for the purposes of valuing assets pursuant to Section 506 of the United States Bankruptcy Code. In the Chapter 13 case at issue, the Internal Revenue Service argued that the value of the Debtor’s unliquidated injury claims should be valued at their eventual settlement amount.  Mr. Breeze successfully objected to that position.  As a matter of first impression in any federal circuit, the Chief Bankruptcy Judge of the Eastern District of Missouri agreed that evidence should be adduced at the time of the filing, as the Code requires valuation at the date of the creation of the bankruptcy estate, and adopted Mr. Breeze’s presentation.  The immediate result to the client was a savings and eventually discharge of nearly 75% of the Service’s claim of $250,000.00.

Comments are closed.