Prepetition Liability

(redirected from Pre-Petition Liability)

Prepetition Liability

A liability that a company incurs before filing for bankruptcy protection. Most prepetition liabilities are reduced or discharged in bankruptcy proceedings; the person or company to whom a prepetition liability is due should not expect to receive the full value of the liability unless it is secured by some asset. A prepetition liability contrasts with a postpetition liability, which usually must be paid in full.
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As a result of the settlement, the Company will record a pre-petition liability subject to compromise for its present and future obligations with respect to asbestos-related personal injury claims of approximately $1.
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