Frequently Asked Questions About Bankruptcy Claims

Pioneer is offering creditors in certain Chapter 11 and Chapter 7 cases an opportunity to sell their bankruptcy claims for an immediate, certain cash settlement that can be reinvested in your business. Pioneer accepts the recovery and timing risk so your company keeps the cash settlement regardless of what Pioneer ultimately recovers. See the four steps of buying bankruptcy claims.

The Debtor filed for bankruptcy because it does not have the necessary liquidity to pay its obligations. U.S. Bankruptcy Code states that the filing of a bankruptcy petition suspends all actions against the Debtor. This so-called “automatic stay” prevents creditors from collecting debts or pursuing other remedies against the Debtor.

• Elimination of Recovery Risk: Unsecured creditors are the last in line to receive distributions. In many cases, recoveries are low or non-existent for unsecured claims after administrative expenses (lawyer and advisor fees) and secured creditors are paid. Selling the non-performing bankruptcy claim for cash allows you to secure a definitive recovery, eliminating the risk of an uncertain bankruptcy outcome. There are at least three kinds of risk that indicate trading your bankruptcy claim may be your best resolution.
  
• Immediate Cash Conversion: The average duration of a corporate bankruptcy case is approximately 2 years from the filing date to the plan effective date, but many cases take far longer due to litigation, disputes between creditors, facility shutdowns, and labor issues. Selling your non-performing bankruptcy claim for cash eliminates the time risk associated with a bankruptcy case and allows you to immediately re-invest the cash into your business.
• Elimination of Consideration Risk: Assuming there is sufficient value remaining at the conclusion of a bankruptcy case, unsecured creditors may receive distributions in the form of promissory notes, stock, cash or a combination thereof. Promissory notes and stock are difficult and costly to liquidate and often cannot be sold immediately. Selling your non-performing bankruptcy claim for cash eliminates the risk of receiving illiquid securities.
• Elimination of Time and Cost associated with the Bankruptcy Process: Corporate bankruptcy cases involve a great deal of paperwork and correspondence between the Debtor, the bankruptcy court and creditors. Selling your non-performing bankruptcy claim for cash eliminates the time, money and valuable human resources required to follow and participate in a bankruptcy case from beginning to end.
• Favorable Tax Benefits: Selling your non-performing bankruptcy claim for cash may provide your company with a tax benefit by applying the loss on the uncollected portion of your bankruptcy claim against current Income.

The entire process from first contact to receiving your funds can be completed within a few days. Pioneer typically can process payment within 2 business days of completing documentation.

As a creditor in the bankruptcy case, you can choose to sell the bankruptcy claim or hold the claim until the bankruptcy case proceedings are complete and distributions (if any) are made.

Our offer price is based on several factors including the prospects and level of recovery (which encompasses the Debtor’s financial condition, trends in the Debtor’s industry and any litigation against the Debtor), the estimated time until recovery, the potential for receiving illiquid stock or promissory notes, and our required return.

Bankruptcy court filings are available to the public for review and evaluation through PACER (which is a paid service that requires users to register for a login and password).

No, Pioneer assumes all of the recovery risk in terms of the amount paid on the bankruptcy claim. Pioneer is only entitled to a proportional refund if the face amount of the claim you sold us is reduced or expunged by the bankruptcy court as detailed in the Assignment of Claim Agreement.

Pioneer requires that you have a valid bankruptcy claim that has not been previously sold, objected to, or satisfied. We recommend that you check your records carefully prior to accepting our offer. We reserve the right to review the validity of any claim and may refuse to purchase your claim for any reason.

If you are a creditor in a Chapter 11 bankruptcy case, you may be required to file a Proof of Claim in the bankruptcy court in order to validate your bankruptcy claim against the Debtor. We highly recommend companies file a Proof of Claim to help with the claims reconciliation process. If you are a creditor in a Chapter 7 bankruptcy case, you need to file a proof of claim. For more information on Proofs of Claim including how to file a claim in the bankruptcy proceedings using the Official Form B10, refer to the information on our Proof of Claim Form page.

Once Pioneer receives the complete documentation, we will file the Notice of Transfer of Claim form with the bankruptcy court and no further action to transfer the claim will be required on your part.

No. Pioneer is an independent investment firm (A+ rated by Better Business Bureau) founded in 2009 and is not related to the Debtor or affiliated with the bankruptcy court. Learn more about the principals of Pioneer here. As an expert on bankruptcy matters, Pioneer is featured extensively in the news.

We purchase non-performing invoices and receivables, mechanics liens, lease and executory contract claims, mortgage notes, other types of bankruptcy claims from suppliers, landlords, lenders and other creditors in Chapter 7 and Chapter 11 bankruptcy cases.

We are purchasing claims in a number of bankruptcy cases. Please call us for specific details or complete our Bid Request Form. Alternatively, you can email us a list of bankruptcy trade claims and we will review the documents and contact you within 2 business days.

Please submit your claim on our Bid Request Form.