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Classification of Claims

Absolute Priority Rule in Bankruptcy: Are You Atop the List?

Editor’s Note: This is an updated version of an article published in May of 2013. If you are a vendor, service provider or another unsecured creditor to a chapter 11 debtor, you cannot be blamed for feeling like a duped lover after learning about the bankruptcy of your once devoted business companion. Despite the promises […]


Dealing With Distress for Fun & Profit – Installment #15 – Protecting Your Bankruptcy Claim

This series was started (click here to read from the beginning) with a broad overview of business bankruptcy but our last few installments have focused on unsecured creditors (click here to read about unsecured creditors) and the priority scheme in bankruptcy (click here for the 30,000-foot view or you can find more specific treatment here, here and here). In this […]


RECOMMENDED READING: PACA Claims in Bankruptcy

Certain suppliers of agricultural goods get paid ahead of secured party, both inside bankruptcy and outside bankruptcy. The suppliers benefit from a federal statutory trust imposed to protect them from nonpayment. The goods involved are “fresh fruit and fresh vegetables of every kind and character” – and regulations set the limits on what qualifies. Suppliers […]


Investing in Bankruptcy Claims as a Cash Investment

Investing in bankruptcy claims (i.e., claims of creditors against bankruptcy debtors) can be very profitable or can result in a significant, or even total, loss.  Bankruptcy claims are classified in chapter 11 plans of reorganization according to their relative rights against the debtor.  The recovery of a given class of claims will depend on the […]


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