Document Type
Research Memorandum
Publication Date
2025
Abstract
(Excerpt)
Section 502(j) of title 11 of the United States Code (the "Bankruptcy Code") states that "[a] claim that has been allowed or disallowed may be reconsidered for cause" in a bankruptcy case. 11 U.S.C.S. §502(j). Section 502(j) further states that "a reconsidered claim may be allowed or disallowed according to the equities of the case." Id. There is no definition of "for cause" or "according to the equities of the case," but the courts have generally held that reconsideration ultimately "lies within the discretion of the court." This article will analyze the scenarios under which a bankruptcy court in New York and Delaware may reconsider previously allowed or disallowed claims under Section 502(j). First, the memorandum will discuss the governing law applicable to this issue. Subsequently, the article is divided into two sections; the first will highlight situations in which courts have historically granted motions to reconsider claims, while the second will discuss the rationale adopted by courts that deny reconsideration of claims.