Fourth Circuit Opens Door to Class Proofs of Claim

Posted by NCBRC - February 3, 2012

The Fourth Circuit recently found that class proofs of claim are permissible subject to certification under Bankruptcy Rule 7023 (incorporating Civil Rule 23) and Rule 9014. Gentry v. Seigel, No. 10-2418 (4th Cir. Feb. 2, 2012). NACBA and NACA filed an amicus brief seeking reversal of the bankruptcy court’s decision that the bankruptcy process is always superior to class actions. The Fourth Circuit agreed. It held that certification of a creditor class is fact specific issue to be determined on a case-by-case basis. The court further held that a motion for class certification need not be filed before the expiration of the claims bar date. While the court ultimately affirmed the denial of class certification, it made clear that its decision was based on the specific facts of the case rather than on a bright line rule disfavoring class proofs of claim.
Gentry 4th Cir opinion


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