Administrative Claims in Bankruptcy: Standards for Allowance, Amount, Disgorgement, Limitations, and Bootstrapping

A live 90-minute CLE video webinar with interactive Q&A

Wednesday, November 3, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, October 8, 2021

or call 1-800-926-7926

This CLE webinar will review the allowance of administrative expense claims, which have priority over all other unsecured claims and must be paid in full before other lower-priority claims are paid. The panel will discuss what expenses may or may not qualify, and in what amounts, how creditors can slip approval of administrative expense priority into first-day and other orders, whether the administrative claim is subject to further limitation or disgorgement, and related matters. The panel will offer strategies useful to creditor counsel and indenture trustees to plan accordingly and strategies for other stakeholders who may wish to prevent the allowance of administrative claims that do not meet the appropriate standards.


Generally, only those post-petition expenses, including certain professional fees, that benefit the estate are entitled to administrative priority, and often the amount is limited to the extent of the benefit or some standard of "reasonableness." In many cases, the creditor seeking allowance of an administrative expense must demonstrate that it made a "substantial contribution" to the case, a term not defined in the Bankruptcy Code and often litigated.

Some creditors attempt to evade these standards by putting an obligation to pay attorneys' fees or costs related to bankruptcy in an underlying contract, such as a restructuring agreement or a sale agreement under Section 365. Creditors must be alert to these practices and be quick to object to orders that hand out administrative priority status too easily.

Even if a claim is allowed as an administrative expense, the claim may still be reduced or subordinated for under other Bankruptcy Code provisions and scenarios, including conversion to Chapter 7 or reconversion to Chapter 11, set-off rights, unsecured post-petition financing under Section 364, structured dismissals, and Subchapter V payout provisions.

Listen as our experienced panel of business bankruptcy attorneys shares best practices for creditors seeking administrative expense priority, discusses how stakeholders can limit questionable administrative expense requests, and takes a practical look at the ultimate value of having a request for administrative claim granted.



  1. Bankruptcy priority scheme overview
  2. Mechanics of requesting administrative priority
  3. Bankruptcy Code Section 503(b)
    1. Who may seek administrative expense priority
    2. Standards for allowance
    3. Amount of the claim
  4. Trumping administrative priority
    1. Effect of pendency of avoidance action
    2. Allowance via 363(b), 365, first day orders
    3. Applicability of equitable subordination
    4. Applicability in structured dismissals
    5. Sub V payment of administration expense
    6. Conversion and reconversion
    7. Applicability in Chapter 7
  5. Strategies for obtaining or challenging requests for administrative claim status


The panel will review pivotal issues about administrative expense claims, such as:

  • What is a substantial contribution, and is it always required to achieve administrative priority?
  • May a bankruptcy court authorize a debtor to pay creditors' fees and expenses under Section 363(b) or 365?
  • What happens if the case is converted to Chapter 7?
  • Does the same standard for allowance apply to claims in Section 503(b)(3)(A) through (F) and 503(b)(4)?


Selbst, Stephen
Stephen B. Selbst

Herrick, Feinstein

Mr. Selbst has more than 30 years of experience representing debtors, creditors, official committees, distressed...  |  Read More

Smith, Steven
Steven B. Smith

Herrick, Feinstein

Mr. Smith focuses his practice on complex corporate restructuring and creditors' rights, including in court Chapter...  |  Read More

Attend on November 3

Early Discount (through 10/08/21)

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Early Discount (through 10/08/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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