Priority Waterfall: Who Gets Paid Before Whom

waterfall A liquidation has $30,000 after secured collateral issues. Claims include $5,000 in administrative expense, $9,000 in unpaid wages, $11,000 in recent taxes, and $60,000 in general unsecured trade and card debt. Priority waterfall: classify claims -> apply priority order and limits -> distribute remaining funds The common trap is to divide money equally among everyone who is owed money. Classify claims Separate administrative expense, wage priority, tax priority, and general unsecured debt before calculating percentages. A distribution cannot be correct if all unsecured claims are placed in one pile. Apply order Pay higher-priority categories first, subject to the statute…

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