Term
Claims against the estate
Claims that arose during bankruptcy or relate to its conduct, such as the trustee's fee, the cost of managing the assets or wages for work after bankruptcy was declared. They are paid ahead of ordinary filed claims.
Updated
What it means
Claims against the estate are claims that arose during bankruptcy or relate to its conduct. They include the trustee's fee and expenses, the cost of managing and realising assets, employees' wages for work after bankruptcy was declared, and taxes and energy linked to continued operation.
Unlike ordinary claims, which creditors lodge by filing a claim, claims against the estate are not filed. They are asserted directly with the trustee and paid from the bankruptcy estate with priority, ahead of the other creditors.
The rationale is practical: without priority, nobody would supply goods, services or labour to a business in bankruptcy, and the trustee could neither maintain the assets nor sell them at a good price. Claims against the estate are what allow a bankruptcy to function at all.
How it works in practice
A supplier dealing with a company in bankruptcy should contract with the trustee and make sure its claim will qualify as a claim against the estate. Invoices are addressed to the trustee and asserted with them in the order set by law.
Employees who keep working after bankruptcy is declared have their wages as a claim against the estate. Wages for the period before the declaration are filed in the ordinary way, and part of them may be covered by guarantee insurance from the Social Insurance Agency.
If the estate cannot cover even the claims against it, the law sets their ranking among themselves and the trustee may propose ending the bankruptcy for lack of assets. The creditors' committee therefore watches that the costs of the procedure do not swallow the proceeds meant for creditors.
What to watch out for
Not every claim arising after the declaration is automatically against the estate. The statutory list and the link to the bankruptcy decide; if the trustee disputes the claim, the creditor must sue within the deadline or risk losing it.
Claims from before the bankruptcy cannot be turned into claims against the estate simply by issuing the invoice later. What counts is when the entitlement arose and when performance was delivered, and attempts to get around this will be rejected by both trustee and court.
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