District Court Denies Plaintiffs' Counsel's Appeal, Finds Claimants' Post Bar Date Ratification of Proofs of Claim to Be Ineffective

Mission Towers v. W.R. Grace, C.A. No. 07-287 (D. Del. Dec. 6, 2007) (Senior Judge Ronald L. Buckwalter)

The law firm of Speights & Runyan filed thousands of claims on behalf of creditors in the W.R. Grace & Co. bankruptcy.  The debtors moved to expunge and disallow 71 of the claims, contending that Speights & Runyan lacked express authority to file the proofs of claim as of the time that they were filed.  The United States Bankruptcy Court for the District of Delaware held that, although a claimant may authorize the filing of a claim after it is filed, if the ratification occurs after the bar date has passed, that ratification is insufficient to make the claim timely filed.  Accordingly, because authorization for these 71 claims was not established as of the deadline for filing proofs of claim, the Court expunged and disallowed the claims.  The United States District Court for the District of Delaware affirmed.

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Court Disallows Claim, Finding That Doctrine of Ratification Did Not Rescue Proofs of Claim Filed Before Bar Date by Counsel, Where Ratification Came After Bar Date

In re W.R. Grace & Co., 366 B.R. 302 (Bankr. D. Del. 2007) (Judge Judith K. Fitzgerald)

The law firm of Speights & Runyan filed thousands of claims on behalf of creditors in the W.R. Grace & Co. bankruptcy. The debtors moved to expunge and disallow 71 of these claims, contending that Speights & Runyan lacked express authority to file the proofs of claim as of the time that they were filed. The United States Bankruptcy Court for the District of Delaware held that, although a claimant may authorize the filing of a claim after it is filed, if the ratification occurs after the bar date has passed, that ratification is insufficient to make the claim timely filed. Accordingly, because authorization for these 71 claims was not established as of the deadline for filing proofs of claim, the Court expunged and disallowed the claims.

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Court Permits Creditor To File Late Proof Of Claim Because Of Excusable Neglect Where Claim Was Scheduled By Debtor In Different Amount, But Creditor Filed Claim Three Days After Claim Bar Date

In re Garden Ridge Corp., 348 B.R. 642 (Bankr. D. Del. 2006) (Judge Randolph Baxter)

The Debtor Scheduled a Creditor’s Claim in One Amount and the Creditor Filed a Proof of Claim in Another Amount Three Days After the Bar Date. Eighteen Months Later, the Post-Effective Date Committee Rejected the Late Filed Claim. The Court Permitted the Late Filing.

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