Administrative Expense Claim Law and Legal Definition

An administrative expense claim refers to a debt incurred by the debtor, with court approval, after bankruptcy filing. This administrative expense claim arises after the official date of the bankruptcy filing, and the claim is related to costs that are necessary to preserve the estate. For instance, necessary costs of preserving the estate, wages, salaries, court costs, lawyers' fees, accountants' fees, and trustees' expenses.

An administrative expense claim is usually related to a chapter 11 debtor in possession, and includes claims incurred by the chapter 11 debtor in possession to creditors.

The following is an example of a federal law on administrative expense claim:

An entity may timely file a request for payment of an administrative expense, or may tardily file such request if permitted by the court for cause. [11 USCS § 503].