5th Circ. OKs SeaQuest Ch. 11 Claim Subordination

Law360, New York (August 14, 2009, 1:21 PM EDT) -- A federal appeals court has ruled that a $2.7 million unsecured claim in the Chapter 11 case of bankrupt underwater oil field services company SeaQuest Diving LP and general partner SeaQuest General Holdings LLC must be subordinated because the claim arose from the rescission of a purchase or sale of the debtors' security.

The U.S. Court of Appeals for the Fifth Circuit on Wednesday ruled that the claim, based on a state court judgment, had the same priority as common stock and must be subordinated to...
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