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Favorable treatment of critical vendor's pre-petition unsecured trade claims: Another court says yes! (Business Law).(bankruptcy and creditor pre-petition claims; Payless Cashways Inc.)
Introduction
As a general rule, when a debtor files a bankruptcy petition, a trade creditor cannot enforce payment of its pre-petition claim as a result of the automatic stay. Its claim is at the bottom of the priority ladder and is usually not entitled to any priority in treatment. The creditor ends up waiting a long time before finally hearing that there will be no distribution or a nominal distribution on its claim.
However, more and more courts have relied upon the "necessity doctrine" as a basis for approving the debtor's payment of pre-petition unsecured claims during the chapter 11 case. This includes the court-approved payment of the claims of ...
- Payment of Pre-petition Unsecured Trade Claims During a Chapter 11 Case:...
- Magazine article from: Business Credit Nathan, Bruce S. April 1, 2000 700+ words
...of Pre-petition Unsecured Claims The necessity doctrine provides...relying on the necessity doctrine to pay pre-petition unsecured claims during...Consequently, the necessity doctrine's authorization...of pre-petition unsecured claims ...
- Favorable treatment for critical vendors' pre-petition unsecured trade claims:...
- Magazine article from: Business Credit Nathan, Bruce S. September 1, 2002 700+ words
...Vendors' Pre-Petition Unsecured Claims The...of pre-petition unsecured claims during...plan. The necessity doctrine was first...vendors' pre-petition unsecured claims during...relied on the necessity doctrine and upon...
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- Magazine article from: Michigan Law Review Tenny, Daniel March 1, 2005 700+ words
...however, often referred to as the "necessity doctrine." Many courts have declined to...against government entities. (7) The necessity doctrine has great geographical acceptance...circuits have permitted the use of the necessity doctrine. (8) A few circuits have accepted...
- Getting paid now and in full - in bankruptcy: the Necessity Doctrine in action.
- Magazine article from: Business Credit Blakeley, Scott Weilemann, Bill October 1, 1997 700+ words
...and In Full--In Bankruptcy: The Necessity Doctrine in Action ONE OF THE NOTED EFFECTS...to reorganize its finances. The Necessity Doctrine A fundamental principle of bankruptcy...this general rule and labeled it the Necessity Doctrine. Under the doctrine, a debtor may...
- Are You a Critical Trade Vendor That Merits Immediate Payment on Your...
- Magazine article from: Business Credit Blakeley, Scott Ruszat, Richard September 1, 2001 700+ words
An Update on the Necessity Doctrine The faces of chapter 11 debtors are changing...unsecured claims in Chapter 11 bankruptcy under the "Necessity Doctrine." The Necessity Doctrine: Common Law and the Bankruptcy Code Generally...
- The Critical Vendor Doctrine.
- News wire article from: Mondaq Business Briefing February 10, 2004 700+ words
...otherwise low-priority pre-petition unsecured claim to higher priority administrative...better than Kmart's other pre-petition unsecured creditors, which received re-issued...minimus value. However, a pre-petition unsecured creditor of Kmart that did not receive...
- The critical vendor roller coaster.(credit column)
- Magazine article from: Business Credit Nathan, Bruce February 1, 2008 700+ words
...debtor's request to pay the pre-petition unsecured claims of certain favored "critical...approval of payment of the pre-petition unsecured claims of certain favored critical...elevated the lower priority pre-petition unsecured claims of participating critical...
- Keystone Emerges From Chapter 11 Bankruptcy Proceedings.
- Press release article from: PR Newswire September 1, 2005 700+ words
...2004) were cancelled; * Pre-petition unsecured creditors with allowed claims against...basis, to Sherman Wire's pre-petition unsecured creditors; * Sherman Wire's pre...ultimately be liquidated and the pre-petition unsecured creditors with allowed claims against...
Source: HighBeam Research, Favorable treatment of critical vendor's pre-petition unsecured trade...