The priority of claims established by Chapter 7 of the Bankruptcy Reform Act of 1978 gives priority to ________.
A) unpaid employee benefit plan contributions over unsecured customer deposits
B) common stockholders over taxes
C) taxes over expenses of administering the bankruptcy
D) preferred stockholders over claims of secured creditors

Question

Quizplus · Accepted Answer

Unpaid employee benefit plan contributions are given priority over unsecured customer deposits according to the priority of claims established by Chapter 7 of the Bankruptcy Reform Act of 1978. This reflects the Act's emphasis on protecting employees' rights in the event of a bankruptcy.

The Priority of Claims Established by Chapter 7 of the Bankruptcy