Ranking of creditors in case of bankrupcy

[ilolay]

Hello,

I am a current employee of a company that recently went into bankrupcy.

I have won an employment tribunal case against my employer and have won a substantial award for sex discrimination, sex harassment, victimisation, unlawful retention of wages in november 2009, which the company has not yet paid.

Can you let me know if I am a preferential creditor in the ranking of creditors in case of insolvency, and if so, if I will have seniority over the ¨normal¨ employees who just claim redundancy payment?

Thank you

 

[xylene]

Redundancy Payment?

Are you in the UK or a commonwealth country?

You ignored the US Law Only and what state you are in...

 

[winner2010]

The 2 main objectives to bankruptcy are to give the debtor a fresh start and to distribute equally to unsecured creditors what is available of the debtor's property in a liquidation or to pay each creditor a pro rata share of their debt according to a payment plan under Chapter 11, 12, or 13. Secured creditors either get their collateral or the value of the collateral in cash. If the collateral is worth less than their claim, then the claim is bifurcated into a secured claim covered by the collateral and an unsecured claim for the remaining portion. The secured claim is paid in full while the unsecured claim receives a pro rata share of any payments to unsecured creditors.

However, there are some unsecured creditors that get a priority in payments over other unsecured creditors because Congress deemed these payments, most notably domestic support obligations (DSO), as being more important than the others. These are known as priority claims and are grouped into 10 categories with descending levels of priority by §507(a)(1) - (10) of the Bankruptcy Code. This priority of claims cannot be modified by state law nor can the states try to circumvent the priority order by creating a statutory lien that applies only to bankruptcy, since these liens can be avoided by the trustee under §545. Neither can the courts modify the order of the priorities, even if it would be more equitable. However, the courts do construe the priority provisions strictly, and the creditor must prove that its claim satisfies the requirements of a priority.