The New Value Defense
Section 503(b)(9) of the Bankruptcy Code allows an administrative expense “for the value of any goods received by the debtor within 20 days before the date of the commencement of a case under this title in which the goods...more
Section 503(b)(9) of the Bankruptcy Code gives a massive boost to creditors that sold goods to a financially distressed customer shortly before the customer’s bankruptcy filing. While claims for goods sold before a bankruptcy...more
Section 503(b)(9) Overview - Ever since its addition to the Bankruptcy Code in 2005, there has been an ongoing debate as to whether electricity is a “good” or a “service” for purposes of section 503(b)(9). If electricity...more
When a debtor files for bankruptcy, its creditors line up to receive payment in order of priority, with claims of vendors and suppliers typically at or toward the back of the line, often receiving pennies on the dollar. ...more
An Eleventh Circuit Court of Appeals’ decision permits a creditor both to be paid in full under Bankruptcy Code section 503(b)(9) for goods delivered within 20 days before commencement of a bankruptcy case, and to use the...more
In this episode of Lowenstein’s Bankruptcy Lowdown, Eric Chafetz and Phillip Khezri of the firm’s Bankruptcy & Restructuring Department discuss a recent Eleventh Circuit Court of Appeals decision that the post-petition...more
Preference defense received an important boost this week when the Eleventh Circuit decided that invoices paid under 11 U.S.C. § 503(b)(9) can count as "new value" in defending against preference claims. It is the first...more
Since its enactment as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, section 503(b)(9) of the Bankruptcy Code has provided an important safety net for creditors selling goods to financially...more
Under section 503(b)(9) of the Bankruptcy Code, a creditor may recover as a priority administrative expense the value of goods sold to the debtor in the ordinary course of its business that are “received” by the debtor within...more
Delaware’s Bankruptcy Court has recently issued two insightful opinions that impact a creditor’s ability to establish the “receipt” element of a valuable 503(b)(9) administrative expense priority claim. CASE 1: In re SRC...more
Many creditors that provide goods to a debtor before a bankruptcy case begins believe that their recovery will be mere cents on the dollar. While prepetition claims often receive small, if any, distributions, Section...more
Unsecured creditors frequently find themselves in the lurch when a company files for bankruptcy. One of the few mechanisms for recovering the value of goods supplied to a debtor prior to a bankruptcy case is an administrative...more
Signed, sealed, delivered, but am I yours? Apparently not, according to the United States Court of Appeals for the Third Circuit, at least in the context of allowed administrative expense claims under Section 503(b)(9) of the...more
In an era when goods or materials often originate from suppliers or manufacturers outside the United States, bankruptcy courts are grappling with when “receipt” of goods occurs for the purpose of 503(b)(9) claims. While...more
The so-called 20-day administrative priority claim (set forth in Section 503(b)(9) of the Bankruptcy Code) is perhaps the best remedy available to vendor creditors in Chapter 11 cases....more
What is Section 503(b)(9)? This section of the Bankruptcy Code provides an allowed administrative expense for “the value of any goods received by the debtor within 20 days before the date of commencement of a case * * * in...more
Many creditors who have supplied goods to a debtor before a bankruptcy case begins think their only prospects for recovery will be pennies on the dollar. While often times, pre-petition claims are relegated to receive small,...more
While section 503(b)(9) claims deserve priority payment over general unsecured claims, they do not provide a basis for stripping a debtor’s defenses in determining the allowed amount of a section 503(b)(9) claim....more
Section 503(b)(9) of the Bankruptcy Code provides creditors with an administrative expense priority claim for value of goods that were received by the debtor in the ordinary course within the 20 days prior to the bankruptcy...more