Different Rules Govern When Claims Accrue By or Against an Estate

Recently, courts have been holding that the accrual of claims by and against an estate are not governed by the same rules. An appeal on the way to the Sixth Circuit will perhaps give some clarity to the issue. Frenville To determine whether a claim accrued before bankruptcy and was therefore discharged, there is no longer a circuit split. In Avellino & Bienes v. M. Frenville Co. (In re M. Frenville Co.), 744 F.2d 332 (3d Cir. 1984), the Third Circuit had held that a claim was not discharged in bankruptcy if it had not arisen under state law before bankruptcy. Third Circuit sat en banc in 2010, overruled Frenville and sided with seven other circuits. See Jeld-Wen Inc. v. Van Brunt (In re Grossman’s Inc.), 607 F.3d 114 (3d Cir. 2010). In Grossman’s, the Third Circuit held that an asbestos claim is presumptively discharged if exposure occurred before bankruptcy, even though injury was not manifest until years later. The en banc court reasoned that Frenville was contrary to the broad definition given to the word “claim” in the Bankruptcy Code. When the tables are turned, the rules recently are different in deciding whether a claim belongs to the estate or to the debtor. In those cases, the result has turned on whether the claim by the debtor accrued under state law before or after filing. In other words, the disc

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