Claims of creditors: late proof entitles claimants to unpaid dividends before further distributions; trustees may be ordered to pay interest and costs. A creditor who did not prove his debt before a dividend cannot disturb prior distributions, but upon proving the debt is entitled to unpaid dividends from funds available for further dividends, and those dividends must be paid before those funds are applied to other dividends. If the bankruptcy trustee refuses to pay a dividend payable after proof, the Adjudicating Authority may order the trustee to pay the dividend and to pay, out of his own money, interest on the dividend and the costs of the proceedings.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Claims of creditors: late proof entitles claimants to unpaid dividends before further distributions; trustees may be ordered to pay interest and costs.
A creditor who did not prove his debt before a dividend cannot disturb prior distributions, but upon proving the debt is entitled to unpaid dividends from funds available for further dividends, and those dividends must be paid before those funds are applied to other dividends. If the bankruptcy trustee refuses to pay a dividend payable after proof, the Adjudicating Authority may order the trustee to pay the dividend and to pay, out of his own money, interest on the dividend and the costs of the proceedings.
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