14A:14-21. Distribution of assets; priorities
286 words·~1 min read·
/nj/title-14a/chapter-14/14a-14-21·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)After payment of all allowances, expenses and costs, and, subject to the laws of the United States and to subsection 14A:14-21(3), the satisfaction of all liens upon the funds of the corporation to the extent of their lawful priority, the creditors shall be paid proportionately to the amount of their respective debts, excepting mortgage and judgment creditors when the judgment has not been by confession for the purpose of preferring creditors. The creditors shall be entitled to distribution on debts not due, making in such case a rebate of interest, when interest is not accruing on the same.
(2)The surplus funds, if any, after payment of the creditors and the costs, expenses and allowances aforesaid, and the preferred stockholders, shall be divided and paid to the general stockholders proportionately, according to their respective shares.
(3)In any distribution to creditors all persons doing labor or service of any character, in the regular employment of the corporation, shall be entitled to priority of payment for the wages, not to exceed $600. for each claimant, due them respectively for all labor, work and services performed within three months before the institution of a receivership action under this chapter. A claim under this subsection 14A:14-21(3) shall have priority over all other claims against the corporation, but shall be subordinate to
(1)a security interest in personal property perfected prior to the date when the receivership action was instituted, which perfected security interest cannot be set aside by the receiver under the provisions of this Chapter,
(2)mortgages upon the real property of the corporation, and
(3)all claims entitled to higher priority by law.
L.1968, c.350; amended by L.1973, c. 366, s. 75, eff. May 1, 1974.