It's Time To Talk Section 503(b)(9): A Refresher

We all know that general unsecured creditors, like holders of trade debt, often receive little to no recovery on account of the debt they are owed when a customer files for bankruptcy. Luckily, Section 503 of the Bankruptcy Code provides some relief to creditors that provide goods to a debtor 20 days prior to the commencement of a bankruptcy case.

Section 503 governs the allowance of administrative expense claims. In bankruptcy, administrative expenses are expenses that are actual and necessary to help preserve the debtor's estate or that provide value to the estate.¹ In a Chapter 11 bankruptcy case administrative claims must be paid in full and are paid after secured claims, but before general unsecured claims.