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Bankruptcy Law/Chapter 11 Priority Claims

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Expert: - 10/8/2009


Question
I am the owner of a S Corp and was awarded a $20,000 judgement in the state of Virginia against one of my customers (also a corporation based in Maryland)on 08/17/2009.  My customer filed Chapter 11 on 09/28/2009.  Does my judgement qualify as priority?  If so, would this still be the case if the judge did not sign the judgement until 09/28/2009 or later?


Answer
The judgment is definitely not a priority claim.  If you converted the judgment into a lien more than 90 days prior to the filing of the bankruptcy case, then you may have a perfected security interest against whatever assets the lien attached to.   IF the judge didn't enter the order on the judgment until after the CH. 11 case was filed, then there is no judgment.

Either way, it looks like you (your corporation) just has a general unsecured claim for whatever the amount is that is owed to your corporation.

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

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    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

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