Post-Petition Lenders: Does Your Super-Priority Claim Trump Post Conversion Expenses?

October 26, 2016

Key points:

  • While DIP Lenders rightfully negotiate for super-priority administrative expenses which trump post conversion chapter 7 administrative expenses, these provisions are not uniformly enforced.
  • DIP Lenders should require the inclusion of specific language providing that section 364(c)(1) super-priority claims have priority over chapter 7 administrative expense claims, including those to be incurred by a chapter 7 trustee above the agreed upon “burial expenses.”

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