In Matter of Kmart Corp. the appeals court held that the bankruptcy trustee was empowered to use his best business judgment in deciding which creditors were to be paid first as he attempted to salvage Kmart operations.

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In Matter of Kmart Corp., the appeals court held that the bankruptcy trustee could not prioritize certain creditors over others based on his own discretion; instead, payments had to adhere to the priority scheme established by bankruptcy law.