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Substantial Contribution Claims

Where a creditor retains a professional to advance a particular position in a Chapter 11 case whose efforts result in the making of a substantial contribution to the case, such creditor can potentially get reimbursed for all of its out-of-pocket expenses, including for reasonable compensation for professional services rendered.

30 minute read February 23, 2010 at 10:43 AM
By
Steven B. Smith and Jennifer A. Muller
Substantial Contribution Claims

In order to encourage active and meaningful participation by creditors in a Chapter 11 bankruptcy case, the drafters of the Bankruptcy Code included a provision therein which grants creditors an administrative expense claim for the actual and necessary expenses incurred in making a substantial contribution in a Chapter 11 case.

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