general creditor


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General Creditor

One who is owed an uncollateralized debt. A general creditor has no lien or collateral on the debt except perhaps a claim on unpaid-for goods, depending on the nature of the goods. In the event of bankruptcy in the United States, a general creditor has no automatic right to any part of the debtor's property, and must file a proof of claim in bankruptcy court. In a no-asset Chapter 7 bankruptcy, most debts are discharged to the detriment of the general creditor. In an asset Chapter 7 case, unsecured property is liquidated and distributed to general and other creditors according to the bankruptcy court's ruling. See also: Secured creditor.

general creditor

A lender with an uncollateralized loan, such as the owner of a debenture. In the event that a borrower goes bankrupt, its general creditors are likely to recover a smaller proportion of what is owed them than secured creditors will.
References in periodicals archive ?
General creditors are entitled to be paid in full before equityholders receive anything.
At this time, the rehabilitator does not anticipate that there will be sufficient funds to cover any general creditor claims," Farmer says in the motion.
Even worse, the general creditors of HotelCo can become obstacles to the restructuring by raising objections to any plan supported by Bank.
Continue to treat claims arising from open TBA contracts as general creditor claims.
Then the FDIC could go ahead and agree that it would protect all general creditors of banks in bank failures.
As long as plan assets were owned by the business and carried as a general unsecured asset, subject to the claims of the business's general creditors, an SROF applied.
In the end, creditors serving on creditors' committees should not feel that they are sacrificing their own positions by fulfilling their fiduciary obligations, although there may be times that a creditor's interests are so at odds with the general creditor body that it makes it difficult or impossible for it to separate its fiduciary obligations from its personal needs.
the claim on the collateral must be "perfected" by registering it in a manner that provides other creditors with an opportunity to learn of the claim; still, courts are likely to disregard the agreement and retain the collateral in the estate of the insolvent firm, thus reducing the improperly collateralized creditor to general creditor status.
Lastly, in a point brought home by the Ninth Circuit in its "whipsaw" analogy in Kupetz, Professors Baird and Jackson warn against any law that gives general creditors too much by insuring them against any less than satisfactory transaction a debtor may enter into.
24) To the extent the trustee had rights akin to those of a creditor, moreover, they were merely the rights of a general creditor, significantly limiting the authority of the trustee.
Part I examines how the prototypical general creditor has changed.
161) Employee entitlements and personal injury claims have been given priority ranking in insolvency above other general creditor claims: Corporations Act 2001 (Cth) ss 556, 560.

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