Duncan Corp. is declared bankrupt. The Royal Bank has a mortgage on its manufacturing plant. Employees have a claim for $1,000 each for unpaid wages. The trustee in bankruptcy's fees are $10,000. An unpaid supplier of steel has a claim for products supplied. What class of creditor is the supplier of steel?

Question

Quizplus · Accepted Answer

The supplier of steel is considered an unsecured creditor because they do not have any collateral backing their claim, unlike secured creditors who have specific assets pledged as security.