Practice Areas

Creditor Representations in Business Bankruptcies

Schuh & Goldberg, LLP has handled the representation of creditor interests in bankruptcy cases both big and small. John A. Schuh has acted as the bankruptcy consultant to the City of Cincinnati in two large hotel bankruptcies (In re HRC Joint Venture, 187 B.R. 202) and has handled the collection of a large unpaid tax claim for the City of White Plains, New York in the Ch. 11 Reorganization of Federated Department Stores. John A. Schuh recently overturned lower court decisions and won a decision at the 6th Circuit Ct. of Appeals entitling the city to recover in excess of $1,000,000.00 in taxes.

As an example of the tools that are in our bag, we have converted unsecured claims to secured or administrative claims through reclamation demands. This issue is commercial in nature and is available to a seller of goods to a buyer who files for bankruptcy relief.

UCC Article 2-702 (Ohio Rev. Code sec. 1302.76) is a “Seller’s remedies on discovery of buyer’s insolvency”. It gives a seller of goods a 10 day right to reclaim goods sold on credit upon written demand to the debtor. The 10 days runs from the date that the goods were delivered to the debtor.

Once the reclamation demand has been given, the debtor must grant the creditor an administrative expense claim pursuant to sec. 503(b) of the Bankruptcy Code or a lien on the product, all as is contemplated by 11 U.S.C. sec. 546(c)(2). A. reclamation demand can convert an otherwise unsecured claim into a secured or administrative claim for any goods delivered to the debtor within the 10 day period.

Reclamation demands are just one small example of how our expertise can maximize recovery to you when there is an unexpected bankruptcy of one of your customers. We think and react very quickly.


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