Parties Buying Discounted Claims Should Have Equal Chance to Recover as Original Claimants According to Latest ABI Quick Poll
Parties Buying Discounted Claims Should Have Equal Chance to Recover as Original Claimants According to Latest ABI Quick Poll
Contact: John Hartgen
703-894-5935
[email protected]
PARTIES BUYING DISCOUNTED CLAIMS SHOULD HAVE EQUAL CHANCE TO RECOVER AS ORIGINAL CLAIMANTS, ACCORDING TO LATEST ABI QUICK POLL
May 24, 2011, Alexandria, Va.— An overwhelming
majority of respondents (74 percent) in a recent ABI Quick Poll believe
that a party who bought claims for pennies on the dollar should have the
same chance at potential recoveries in bankruptcy as the original
claimants. Sixty-three percent “strongly disagreed” and 11
percent “disagreed somewhat” that a party who bought claims
for pennies on the dollar should receive less in bankruptcy than the
original claimants would have gotten.
Though it is a speculative activity, parties purchasing bankruptcy
claims have the potential to recover more than their initial investment
as a company is wound down. Creditors also have the ability to cash out
their claims quickly at a set price. Purchasing and trading bankruptcy
claims in large corporate bankruptcies continues to grow. For example,
SecondMarket Holdings Inc. reported that bankruptcy claims against
Lehman Brothers Holdings Inc. saw 380 claims traded in April for a
combined face value of $1.8 billion. Nearly $42 billion of Lehman claims
have traded since the firm filed for chapter 11 protection, according to
SecondMarket.
Twenty-one percent of respondents thought that a party who bought claims
for pennies on the dollar should receive less in bankruptcy than the
original claimants would have gotten. Two percent did not know or had no
opinion on the poll question.
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and
the public are invited to respond to a question on a timely bankruptcy
or insolvency issue. Visit http://www.abiworld.net/quickpoll/
to access the results of previous ABI Quick Polls.
###
ABI is the largest multi-disciplinary, nonpartisan organization
dedicated to research and education on matters related to insolvency.
ABI was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The ABI membership includes over 13,000
attorneys, accountants, bankers, judges, professors, lenders, turnaround
specialists and other bankruptcy professionals, providing a forum for
the exchange of ideas and information. For additional information on
ABI, visit www.abiworld.org. For
additional conference information, visit http://www.abiworld.org/conferences.html.