So they were not subject to claims of preferential creditors.

So the preferential creditors had a prior claim.

Importantly, secured and preferential creditors' entitlements cannot be reduced without their consent.

The administrative receiver's task is to recover enough money to pay their costs, the preferential creditors, and the floating charge holder's debt.

The right of the Crown as a preferential creditor was removed by the Enterprise Act 2002.

However, the company liquidator argued that the accountants should only be paid after preferential creditors and debenture holders.

Preferential creditors are similarly protected.

Among the preferential creditors, the insolvency practitioners' fees together with adopted contracts attain super-priority.

In most legal systems, only fixed security takes precedence over all claims; security by way of floating charge may be postponed to the preferential creditors.

More controversially, the Crown for certain unpaid taxes and other levies is also accorded the status of preferential creditor.

The balance available, if any, after the preferential creditors are repaid is available to repay the non-preferential creditors.

In the event of liquidation, loan stockholders rank beneath debenture-holders and preferential creditors (such as the Inland Revenue).

In the United Kingdom employees are preferential creditors for their wages (subject to a statutory limit), as are occupational pension schemes.

These costs, combined with the claims of the preferential creditors, entail a substantial erosion of the entitlement of the floating charge holder.

Generally these funds will be used to first pay secured creditors, then, if any funds remain, preferential creditors and finally unsecured creditors.

The trustee/liquidator must satisfy HMRC that such a shortfall regarding preferential creditors exists.

Preferential creditors include Customs and Excise, which is investigating Olympic to see how much VAT the company has neglected to pay.

In the event of insolvency, unsecured creditors will be paid after secured and preferential creditors and on an equal basis with other unsecured creditors.

An unsecured creditor is a creditor other than a preferential creditor that does not have the benefit of any security interests in the assets of the debtor.

The holders of a floating charge take subject to preferential creditors and a "ring fenced fund" for up to a maximum of £600,000 reserved for paying unsecured creditors.

'The preferential creditors are now in the process of being cleared and the leasing agreements are being picked up, so those are no longer liabilities of the old partnership.

He said there was a floating charge throughout, so the company's preferential creditors were entitled in a receivership to priority under IA 1986 s 40 with regard to uncollected debts.

A preferential creditor (in some jurisdictions called a preferred creditor) is a creditor receiving a preferential right to payment upon the debtor's bankruptcy under applicable insolvency laws.

Consequently it has been thought unjust that they should obtain priority over employees (one of the categories of preferential creditor) who have priority to the shareholders in the event of the company's liquidation.

This would mean that insolvency law should have no requirement that a company should be rescued (unless creditors agree to it) and should have no classes of preferential creditor (except for unlimited security interests).