Without clear instructions from the Bankruptcy Code on what to do with the unclaimed money that is too small to distribute among a liquidated company’s creditors, ABI is encouraging members to donate the money to the organization’s own nonprofit endowment fund, the Wall Street Journal reported today. “Rather than having it [turn over] to the state, why not recycle it into the bankruptcy community?” said ABI executive director Sam Gerdano. ABI has a 131-word passage posted on its website that bankruptcy attorneys can copy and paste into creditor payout plans to direct the money to the fund, which pays for scholarship and bankruptcy research. The trade group’s initiative comes at a time when many restructuring professionals are confused over what to do with unexpected leftover money in a liquidating chapter 11 bankruptcy case. That money can come from uncashed creditor checks, tax rebates or returned utility deposits. ABI’s endowment fund pays for bankruptcy-related research into topics such as the high fees in corporate bankruptcy cases or the cost of bankruptcy for individuals. “In lieu of people throwing around anecdotes or impressions or first-hand experiences, we provided data-supported conclusions,” said University of Maine Law Professor and Bankruptcy Attorney Lois Lupica.
For more information about donating unclaimed liquidation funds to the ABI Endowment Fund, please click here: http://endowment.abi.org/unclaimed