The key aspects of the rule changes include:

• "Demands for relief" must be brought as adversary proceedings and may not be included in a claim objection under section 502;
• Claim objection pleadings and exhibits must include more detailed information;
• There are limits on the type of objections that can be filed as omnibus objections.

Timing and Service: Rule 3007(a) provides that claim objections must be mailed "or otherwise delivered to the claimant" within 30 days before the hearing. Query whether "or otherwise delivered" can mean email.

Demands for Relief: "Demand for relief" is the term of art used in Rule 3007(b) and in general commercial litigation. In plain English, it means "counterclaim," or a request for money damages or some other form of affirmative relief against the claimant. Examples of demands for relief are found in Rule 7001, and include actions to:

• Recover money or property;
• Determine the validity, priority, or extent of a lien or other interest in property;
• Obtain an injunction or other equitable relief;
• Subordinate any allowed claim or interest, except when subordination is provided in a chapter 11 plan;
• Obtain a declaratory judgment relating to any of the above.

Rule 3007(b) now provides that a "demand for relief" cannot be brought as part of a claim objection under Bankruptcy Code section 502. A demand for relief must be brought as an adversary proceeding. This will not change the current practice of many of you who are already doing this.

Increased Use of Tailored Claim Objection Procedures: As you know, we are big fans of claim objection procedures. We support the development of "Tiered" claim objection procedures that are specially tailored for each case. This provides a roadmap for the court and parties in interest and ensures transparency and clarity in the process. The drafters of the amendments provided a mechanism to request entry of an order approving tailored claim objection procedures in section 3007(c), which provides, "unless ordered by the court or permitted by subdivision (d) [the omnibus claim objection provision], objections to more than one claim may not be joined in a single objection."

Important: You should also be aware that the Bankruptcy Court for the District of Delaware issued a general order directing that amended Rule 3007(c) is not applicable in Delaware cases filed in accordance with Local Rule 3007-1. The General Order is available at www.deb.uscourts.gov under "what's new."

Type of Allowed Omnibus Claim Objections: Rule 3007(d) limits the type of objections that can be filed in an omnibus format. If the basis for the objection does not appear on the list below, it cannot be filed as an omnibus objection. Here is the list:

• The claim is a duplicate
• The claim was filed against the wrong debtor
• The claim was amended
• The claim was filed after the bar date
• The claim was satisfied during the case
• The form of the claim was not "presented" in accordance with the rules and that fact is pointed out in the objection ("unsubstantiated" or, "no basis")
• The claim is based on an equity interest
• The claim asserts priority in excess of statutory limits in section 507 ("misclassified")

Under Rule 3007(d), an omnibus CANNOT be used to reduce a claim. You cannot file a "books and records" objection in an omnibus under the new rules. In appropriate circumstances, consider moving for approval of claim objection procedures that allow "books and records" objections.

An omnibus CAN be filed to reclassify a claim, however. Number 8 above allows this. Section 507 of the Bankruptcy Code provides for unsecured priority treatment to employees, taxing authorities, etc. There is a set of boxes on the proof of claim form that can be checked if the claim is entitled to priority. Those boxes set out the various priorities under section 507. The drafters of this provision assume that an objection can be filed to reclassify a claim of a general unsecured creditor who incorrectly checked one of those boxes on the proof of claim form.

Requirements for Filing Omnibus Objections: There are some new requirements for the objection pleadings and exhibits, which, for the most part, mirror our current "Tiered" approach. Here is the list of requirements:

AlixPartners: Exhibits must: (1) alphabetize the claimants, (2) include claim numbers, (3) show the grounds for the objection, (4) cross reference the page number of the objection pleading where the ground for the claim objection is discussed, and (5) if appropriate, list the category of claims (example, contract rejection).

Counsel: The debtor's name and the basis for the objection must appear in the title of the claim objection pleading. If you read Claims Chat, you know that we also recommend identifying each claimant either in the title or in a parenthesis on the electronic docket. That makes it easy to key word search the electronic docket for pleadings that impact particular creditors.

Counsel and AlixPartners: You are limited to 100 claims per objection.

Please contact us if you would like to collaborate on a training/CLE concerning the amendments to Rule 3007 and the development of claim objection procedures.

Contacts are:
Carrianne Basler at 312.705.3907 or cbasler@alixpartners.com
Todd Brents at 214.647.7629 or tbrents@alixpartners.com
Michelle Campbell at 213.437.7157 or mcampbell@alixpartners.com
Barry Folse at 214.647.7626 or bfolse@alixpartners.com
Meade Monger at 214.647.7621 or mmonger@alixpartners.com

AlixPartners offers a full suite of services for debtors, committees, acquirers and other stakeholders in distressed and Chapter 11 situations. Our small teams of experienced professionals combine strong legal and financial skills to manage and reconcile critical information.

• Claims Agent
• Claims Valuation Experts for debtors, committees and other stakeholders
• Director of Communications for stakeholders and creditors
• Avoidance-action-review consultants for debtors, committees and acquirers
• Data-mining and electronic-discovery consultants for litigation, investigations or due diligence reviews
• Liquidating trustee or consultants to the trustee
• Disbursing agent or Chapter 11 plan trustee
• Plan voting and solicitation agent
• Creditor advisor, including the development of creditor web sites