6-115. Distributions.

764 words·~3 min read·/ne/chapter-6/6-115

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)In this section, protected secured creditor means a secured creditor whose lien:

(1)is a perfected lien;

(2)cannot be avoided by the assignee under subdivision (b)(12) of section 6-110 ; and

(3)is not subordinate to the assignee's lien.

(b)Except as provided in section 6-116 , the assignee shall pay claims from the assignment estate allowed under section 6-111 in the order of priority stated in this section.

(c)Unless otherwise agreed between the assignee and a protected secured creditor, before distributions under subsections (d), (e), (f), and

(g)of this section, and in accordance with the priorities of creditors with liens under other law, the protected secured creditor shall receive the asset or the proceeds from the collection on or disposition of the asset to the extent of the value of the protected secured creditor's interest in the asset, less the assignee's reasonable and necessary expenses of preserving or disposing of the asset to the extent the expenses benefit the protected secured creditor and are incurred with the protected secured creditor's consent or acquiescence. The protected secured creditor has an unsecured claim under subdivision (g)(2) of this section for the amount of the claim that remains after deducting the amount or value of an asset the protected secured creditor receives under this subsection. To the extent a claim is secured by an asset the value of which, after the deductions provided under this subsection, is greater than the amount of the claim, the protected secured creditor may receive interest on the claim and any reasonable fees, costs, or charges provided for under the agreement or other law under which the claim arose.

(d)After the distributions under subsection

(c)of this section, the assignee shall pay the necessary costs of the administration of the assignment estate. The costs include:

(1)fees and reimbursements of the expenses of the assignee and any professionals engaged by the assignee;

(2)post-assignment taxes incurred by the assignee;

(3)post-assignment rent incurred by the assignee in occupying premises on which assets of the assignment estate are located or the business of the assignor is conducted;

(4)post-assignment lease payments incurred by the assignee in renting personal property used in the business of the assignor; and

(5)amounts required to be paid under the assignment agreement for expenses of winding up the assignment under section 6-119 .

(e)After the distributions under subsections

(c)and

(d)of this section, the assignee shall pay claims entitled to priority under federal law including under 31 U.S.C. 3713 from the assignment estate.

(f)After the distributions under subsections (c), (d), and

(e)of this section, the assignee shall pay claims from the assignment estate for wages, salaries, or commissions earned not more than one hundred eighty days before the earlier of the effective date of the assignment agreement or the cessation of the assignor's business. Payment shall be limited to the greater of:

(1)the amount of the claim allowed as a priority claim ahead of claims of other unsecured creditors under the Bankruptcy Code, 11 U.S.C. 101 et seq.; or

(2)the amount allowed as a priority claim ahead of claims of other unsecured creditors under applicable nonbankruptcy law.

(g)After the distributions under subsections (c), (d), (e), and

(f)of this section, each creditor shall receive a distribution of the assets of the assignment estate in the following order of priority:

(1)unsecured claims entitled to priority ahead of claims of other unsecured creditors under other law; and

(2)unsecured claims not entitled to priority.

(h)If the assets available for distribution to claims with equal priority under subsection

(g)of this section are insufficient to pay the total amount of the claims with that priority, each creditor with a claim with that priority shall receive a pro rata distribution of the available assets based on the proportion the amount of the creditor's claim bears to the total amount of the claims with that priority.

(i)If the claims entitled to the distribution under subsections (c), (d), (e), (f), and

(g)of this section are paid in full, the residue shall be distributed to allowed claims evidenced by a late-filed proof of claim, other than a late-filed claim allowed by the assignee under subdivision (b)(2) of section 6-111 , and, after the allowed claims evidenced by a late-filed proof of claim have been paid in full, as provided in the assignment agreement.

(j)An assignee may make interim distributions after considering future expenses and the reserves for disputed claims established under subsection

(c)of section 6-112 .