The Kmart trade lien program--is it what it is cracked up to be? (Business Law).(Statistical Data Included)

Introduction

A company's need for trade credit only increases when it encounters financial difficulties, and particularly when it flies a Chapter 11 petition. That leaves a trade creditor between a rock and a hard place. The Bankruptcy Code offers a trade creditor limited protection by granting an administrative priority claim for any unpaid trade credit extended during the bankruptcy case. This claim is payable ahead of the claims of general unsecured creditors and lower level priority creditors. Unfortunately, an administrative priority claim may be of little or no benefit in the face of a lender's blanket security interest in the debtor's assets and ...