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The Limitations Of Administrative Expense Claims

Law360, New York (October 5, 2017, 11:34 AM EDT) -- Creditors lacking liens to secure their claim can fare poorly in a bankruptcy case. The “absolute priority rule” is a bedrock principle of bankruptcy law and provides that a creditor at a particular rung of the claim priority hierarchy must be paid in full before any money flows down to junior creditors. Secured creditors reside near the top of the hierarchy, followed by administrative expense claimants, priority claimants and general unsecured creditors. In many cases, there is insufficient money to pay secured creditors in full, thus...
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