Chapter Twenty-two. Administration

Chapter Twenty-two. Administration
 After reading this chapter, you will be able to:
List the order of distribution to classes of
Describe how to outline the entire bankruptcy
administrative process, in terms of both steps
and time
Order of Distribution
 When the assets of an estate have been fully
liquided and all allowable claims have been
determined as to priority and amount, the
proceeds will be distributed to the creditors.
 The order of distribution for nonsecured
creditors is specifically outlined in Section
General Priority of Claims
1. Administrative (503)
2. Priority (507)
3. Secured (506)
4. Unsecured (726)
5. Subordinated (510(c))
6. Interest
7. Debtor
Method of Distribution
 When assets are distributed, they are
distributed on a pro rata basis to each
category or class of claim until the class has
been paid in full.
 Pro rata means that if there are insufficient
assets to pay the claims of a class in full, then
the claimants within the class are paid an
equal percentage of their claims.
Order of Claims Distribution
 Priority Secured Administrative Claims
 Administrative Claims
 Priority Claims Authority
 Secured Claims
 Timely Filed Unsecured Claims
 Late Filed Unsecured Claims
 Fines or Penalties Not Compensation for Actual
Damages; Punitive Damages
 Subordinated Claims
 Postpetition Interest
 Debtor—Solvent Estate
Bankruptcy Administration