1. Chapter Twenty-two. Administration After reading this chapter, you will be able to: List the order of distribution to classes of creditors Describe how to outline the entire bankruptcy administrative process, in terms of both steps and time

2. Order of Distribution When the assets of an estate have been fully liquided and all allowable claims have been determined as to priority and amount, the proceeds will be distributed to the creditors. The order of distribution for nonsecured creditors is specifically outlined in Section 726.

3. General Priority of Claims 1.Administrative (503) 2.Priority (507) 3.Secured (506) 4.Unsecured (726) 5.Subordinated (510(c)) 6.Interest ___________________________ 7.DebtorSolvent Estate

4. Method of Distribution When assets are distributed, they are distributed on a pro rata basis to each category or class of claim until the class has been paid in full. Pro rata means that if there are insufficient assets to pay the claims of a class in full, then the claimants within the class are paid an equal percentage of their claims.

5. Order of Claims Distribution Priority Secured Administrative Claims Administrative Claims Priority Claims Authority Secured Claims Timely Filed Unsecured Claims Late Filed Unsecured Claims Fines or Penalties Not Compensation for Actual Damages; Punitive Damages Subordinated Claims Postpetition Interest Debtor—Solvent Estate

6. Bankruptcy Administration Timeline