Face amount is the starting reference
The face amount is the amount of the claim being evaluated. It is not a promise of a court-approved balance, a future distribution, or today’s purchase price.
How bankruptcy claim pricing works
Understand the price behind the percentage.
Face amount, purchase rate, and cash proceeds describe different things. A useful offer makes all three clear.
Consideration is the agreed purchase price
In a hypothetical example, a $100,000 claim purchased at 48% produces $48,000 in gross consideration. This is an illustration of arithmetic, not an indication of Wychwood pricing or what any case will recover.
Proceeds account for the details
If that example included a $1,000 agreed deduction and a $2,000 holdback, the initial payment would be $45,000. The agreement should explain each deduction and the conditions, timing, and uncertainty of releasing the holdback. Receiving-bank fees and your own adviser costs may affect what you retain.
What can change a proposed price
The buyer evaluates claim validity, priority, potential recoveries, timing, objections, defenses, restrictions, and transaction costs. Stronger documents can clarify these questions; they do not guarantee a higher offer.
Compare the whole agreement
Ask what rights are included, when funding is due, what must happen before payment, and when the buyer can seek repayment or another remedy. Two identical percentages can have different commercial effects.
General educational information. The actual agreement and case circumstances control; discuss legal, tax, and financial questions with your advisers.
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