There’s a procedure under the Bankruptcy Code that’s called claims estimation that’s used when litigation threatens to drag on for months or even years. before the amount of a claim that is owed to a creditor is actually liquidated and becomes a certain amount. That could be a problem because the debtor wants to file a plan of reorganization and circulate the plan to creditors, have the creditors vote (which is based upon the amount of money that the creditors are owed) and then have the plan confirmed so that the debtor can exit bankruptcy. But if one large claim is tied up in litigation, that can delay the process. What you can do under those circumstances is something called claims estimation, where the debtor or some other party can file a motion with the bankruptcy court and ask the judge to give an idea of how the litigation will end for the purpose of voting or for the purpose of an interim distribution. Essentially, the judge is going to estimate the amount of the claim based upon a best guess of how the litigation will turn out.
The claims estimation procedure is not a trial and is not binding on what’s going to happen later at a full evidentiary hearing on the claim, but it does give the litigants a useful idea. It gives them an idea about how the judge may rule later on and in any event it’s going to make life much easier towards confirming a plan in the case.
