Section 546(c) of the Bankruptcy Code and the Uniform Commercial Code permit a creditor to make a timely written reclamation demand to the debtor to recover goods sold in the ordinary course of the creditor’s business and received by the debtor within 45 days of bankruptcy.
The written demand must be made within: (a) 45 days of the debtor’s receipt of the goods; or (b) 25 days from the petition date if debtor filed bankruptcy within 45 days of receiving the goods.
The reclamation process is quite onerous, and creditors may be better served if they qualify for a § 503(b)(9) claim.
Learn more about §503(b)(9) claims in Trade Tip #6.
Hajar is an associate with Sugar Felsenthal Grais & Helsinger LLP in both its Business Transactions Group and its Restructuring & Insolvency Group.