Baker goes into bankruptcy owing $5,000 as wages to his employees.There is enough in his estate to pay all costs of administration and enough to pay his employees,but if the employees are paid,there will be nothing left for the general creditors.Which of the following is NOT true under the above facts?

Question

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The Bankruptcy Code provides priority of payment to certain creditors, including wages owed to employees as a priority claim. Secured creditors will be paid before unsecured creditors, but wages owed to employees have priority over all unsecured creditors, including general creditors. Therefore, general creditors cannot be paid before the employees.

Baker Goes into Bankruptcy Owing $5,000 as Wages to His