Whether an involuntary petition suffices as an informal proof of claim is “an issue drenched in uncertainty,” according to Bankruptcy Judge Michael E. Ridgway of Minneapolis.
There are basically two tests employed by circuit courts to determine whether a filed document can serve as an informal proof of claim. According to Judge Ridgway, the Eighth Circuit falls in the camp demanding that the filing describe the nature and amount of the claim and ‘“indicate the claimant’s intent to hold the debtor liable and pursue the claim.’”
Courts reach different results on the same facts because they employ different tests, Judge Ridgway said.
In the case before him, Judge Ridgway said the involuntary petition satisfied the portions of the Eighth Circuit test regarding the amount of the claim and the intent to hold the debtor liable. The involuntary petition, however, did not pass muster as an informal claim because it lacked an “articulated indication” of an intent to “pursue the claim.”
Judge Ridgway’s opinion suggests that the involuntary petition would have sufficed if the creditor had participated in the bankruptcy by filing other pleadings. In any event, the varying standards among the circuits beg for resolution in the Supreme Court.