Date of Physical Delivery Under the UCC Determines Priority

  |  
Article
Elizabeth R. Schlecker
ABI Journal

Vendors who sell goods to a debtor pre-petition typically hold pre-petition unsecured claims unless they qualify for administrative expense status under § 503(b)(9) of the Bankruptcy Code, because the goods were delivered to the debtor in the 20 days preceding bankruptcy. Likewise, vendors who sell goods to a debtor after the bankruptcy has been filed would have those claims treated as administratives under § 503(b)(1)(A).

However, for international sellers, this analysis is not so simple. With shipment times up to 30 days or longer, these sellers could gain or lose administrative priority depending on whether the goods are treated as delivered when placed aboard a common carrier or when physically received by the debtor. After providing some basic background on methods of shipment, this article discusses two fairly recent cases analyzing issues unique to international sellers.

Related Professionals

Media Contact

Lauren Kornsey, Senior Manager, Marketing and Business Development

About Potter Anderson

Potter Anderson & Corroon LLP is one of the largest and most highly regarded Delaware law firms, providing legal services to regional, national, and international clients. With more than 90 attorneys, the firm’s practice is centered on corporate law, corporate litigation, intellectual property, commercial litigation, bankruptcy, labor and employment, and real estate.

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.