The Limitations of Administrative Expense Claims

05 October 2017 Publication


Gardere financial restructuring and reorganization partner Jason B. Binford published an article for Law360 on the absolute priority rule as “a bedrock principle of bankruptcy law.” 

“In order for any Chapter 11 plan to be confirmed, administrative expense claims must be paid in cash in full. Generally speaking, administrative expense claims are claims related directly to administering the bankruptcy case,” writes Binford. “Examples include fees payable to the United States trustee and fees payable to professionals such as debtor counsel and creditor committee counsel. However, Congress has also used administrative expense claims as a tool for pulling certain types of unsecured claims to the top of the claim hierarchy.”

A member of the firm’s global supply network industry team, Binford works with franchisors, franchisees and related parties to provide workable, real-world solutions to deal with financial distress.

Subscribers can read the entire article here.

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