Ratner's Service Centre encountered financial set backs over a period of time,and eventually found itself insolvent.Among its creditors were the first and second mortgagees of the land and building which Ratner's owned,trade creditors,employees who had not been paid wages,and the municipality,for arrears of property taxes.Ratner's decides not to make a proposal to its creditors.Expenses of the trustee take priority over municipal taxes in the distribution of assets of the bankrupt firm.

Question

Quizplus · Accepted Answer

In bankruptcy proceedings, the expenses of the trustee are considered administrative costs and are given priority over other claims, including municipal taxes, in the distribution of assets.

Ratner's Service Centre Encountered Financial Set Backs Over a Period