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superpriority

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superpriority

The rights of certain creditors of a bankrupt debtor to receive payment before others that would seem to have superior claims to money or assets; typically granted when a creditor provides much-needed financing after the filing of the bankruptcy petition.Attorneys and bankruptcy trustees have a de facto superpriority because they will always be paid from estate assets before any other creditors.



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And superpriority undoubtedly would have this effect: while tort creditors of a bankrupt debtor now typically recover a small percentage on their claims, (166) superpriority would vault them to the top of the claims queue, often increasing their recoveries to 100%.
Suppliers who ship on credit during the Chapter 11 do get paid on a priority basis, over the suppliers with pre-bankruptcy claims, but there still has to be money to pay, and the banks which are likely providing revolving credit to fund the operations in bankruptcy generally have a superpriority claim so that in the event of a post-bankruptcy insolvency, suppliers could still get stuck.
The obligations of Delphi and its domestic guarantors under the DIP facilities benefit from superpriority claim status and perfected first-priority priming liens and guarantees.
 
 
 
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