The $382,901 Check Really is in the Mail

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We recently delivered a $382,901 check to a client in payment of a Bankruptcy Section 503(b)(9) claim, known as a “20-day administrative” claim. The claim arose from the client’s pre-petition sale of goods to its customer. General unsecured creditors received nothing.

Since 2005, when Section 503(b)(9) was added to the Bankruptcy Code, sellers of goods can assert an administrative priority claim for the prepetition sale of goods, if the goods were “received” by the debtor within 20 days prior to the Chapter 11 filing. When are goods “received” in an FOB mill sales contract? The answer is below.

Please see full alert below for more information.

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Topics:  Chapter 11, Debtors, Payment Plans, Secured Creditors, Unsecured Creditors

Published In: Bankruptcy Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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