BMO Bank Loses Bid for $3.1 Million Late Claim in Petters Case

BMO Bank failed in its bid to collect a $3.1 million administrative expense claim filed nine years late in Petters Co.’s bankruptcy prompted by a massive Ponzi scheme.

Chief Judge Shon Hastings of the US Bankruptcy Court for the District of North Dakota said during a Tuesday hearing that she couldn’t grant BMO’s request because the bankruptcy estate no longer exists. Section 503(b)—the provision of US bankruptcy law that authorizes payment of administrative expenses from the bankruptcy estate—doesn’t apply, she said.

“There is no bankruptcy estate,” Hastings said. “And so no authorization can be had.”

Hastings was previously a visiting ...