Follow Us

Law.com Subscribers SAVE 30%

Call 855-808-4530 or email GroupSales@alm.com to receive your discount on a new subscription.

Bankruptcy

Third Circuit Defines 'Received' for Section 503(B)(9) Claims

In Haining Wansheng Sofa Co., Ltd. v. World Imports, Ltd. (In re World Imports, Ltd.), the Third Circuit firmly declared that "received" in Section 503(b)(9) connotes actual physical custody of the goods by the debtor. This turnabout in the interpretation of the meaning of "received" is a significant development, given that such claims frequently arise in business bankruptcies.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

For over a decade now, the Bankruptcy Code has granted a priority of payment with regard to creditor claims for goods received by the debtor in the 20 days before bankruptcy. The law is prosaic enough on its face; a creditor merely needs to demonstrate that the debtor “received” the goods within the prescribed pre-bankruptcy interval, and its claim attains priority as an administrative expense. 11 U.S.C. § 503(b)(9). Ah, but therein lies the rub.

Read These Next