130 F.4th 56
3d Cir.2025Background
- Promise Healthcare Group, LLC and affiliates filed for Chapter 11 bankruptcy on November 5, 2018.
- Patrick Wassmann, an alleged victim of medical malpractice at a Promise facility in 2017, filed a $10 million proof of claim on January 4, 2019, before the claims bar date.
- The Trustee later moved to disallow Wassmann’s claim as time-barred, arguing the limitations period had expired by the objection date.
- The bankruptcy reorganization plan was confirmed September 17, 2020 and went into effect October 1, 2020; the automatic stay lifted at plan effective date.
- The Bankruptcy Court denied the Trustee's motion for summary judgment, holding the claim was valid as of the petition date and Wassmann didn't have to file a separate state court action.
- The Trustee directly appealed, resulting in this appellate decision affirming the Bankruptcy Court.
Issues
| Issue | Trustee's Argument | Wassmann's Argument | Held |
|---|---|---|---|
| Time for Evaluating Claim Validity | Claims must be valid as of objection/evaluation date, not petition date | Validity determined as of petition date per § 502(b) | Validity determined as of petition date |
| Need for Separate State Court Filing | Filing proof of claim is insufficient; must also file timely state action | Timely proof of claim in bankruptcy is sufficient; no separate state action required | No requirement to file state suit if timely claim is filed in bankruptcy |
Key Cases Cited
- Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443 (2007) (Section 502(b)(1) makes available all non-bankruptcy defenses in bankruptcy)
- United Sav. Ass’n of Texas v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365 (1988) (Post-petition interest not generally allowed; statutory interpretation of § 502(b)(2))
- In re Trib. Media Co., 902 F.3d 384 (3d Cir. 2018) (Personal injury claims must be tried in district court unless parties consent)
- Coello v. DiLeo, 43 F.4th 346 (3d Cir. 2022) (Purpose of statutes of limitations: avoid stale claims and unfair surprise)
- In re Flanagan, 503 F.3d 171 (2d Cir. 2007) (Assessment of claim validity as of petition date under § 502(b))