In a recent ABI article, John Theil, lead attorney in Stuart Maue’s bankruptcy group, writes about how the disallowance of a claim under Section 506 does not foreclose allowance under Section 502.
His article focuses on the case Wells Fargo Bank N.A. v 804 Congress L.L.C. On June 23, 2014, the US Court of Appeals for the Fifth Circuit held that the recovery of a secured creditors’ claim was subject to the reasonableness standard under section 506(b) of the Bankruptcy Code, which resulted in little to no recovery for the commission and attorneys’ fee claims at issue. However, the Fifth Circuit remanded the case to the bankruptcy court in order for it to resolve the questions of whether the claims could be pursued and ultimately allowed under Section 502 of the Bankruptcy Code.
For the full article, see News and Articles.