Search results
Results From The WOW.Com Content Network
A preferential creditor (in some jurisdictions called a preferred creditor) is a creditor receiving a preferential right to payment upon the debtor's bankruptcy under applicable insolvency laws. In most legal systems, some creditors are given priority over ordinary creditors, either for the whole amount of their claims or up to a certain value.
An unfair preference (or "voidable preference") is a legal term arising in bankruptcy law where a person or company transfers assets or pays a debt to a creditor shortly before going into bankruptcy, that payment or transfer can be set aside on the application of the liquidator or trustee in bankruptcy as an unfair preference or simply a preference.
Most insolvency law allows mutual debts to be set-off, allowing certain creditors (those who also owe money to the insolvent debtor) a pre-preferential position. In some countries, "involuntary" creditors (such as tort victims) also have preferential status, and in others environmental claims have special preferred rights for cleanup costs.
An unsecured creditor is a creditor other than a preferential creditor that does not have the benefit of any security interests in the assets of the debtor. [1]In the event of the bankruptcy of the debtor, the unsecured creditors usually obtain a pari passu distribution out of the assets of the insolvent company on a liquidation in accordance with the size of their debt after the secured ...
preferential creditors [19] unsecured creditors; As between themselves, the claimants in each level rank pari passu as between themselves. [19] Preferential claims are mostly sums due to employees (up to a limit) and certain sums due to Government. [20]
Re Barleycorn Enterprises Ltd [1970] Ch 465 is a UK insolvency law case, concerning the priority of creditors in a company winding up.It was held that fees for liquidation came in priority to preferential claims and floating charges.
The first party is called the creditor, which is the lender of property, service, or money. Creditors can be broadly divided into two categories: secured and unsecured. A secured creditor has a security or charge over some or all of the debtor's assets, to provide reassurance (thus to secure him) of ultimate repayment of the debt owed to him ...
Certain creditors have preferential status (e.g. secured creditors, tax creditors, & employees) and must be repaid in full to the extent that the company's assets permit them to be. The balance available, if any, after the preferential creditors are repaid is available to repay the non-preferential creditors.