EFFECT OF INSOLVENCY PROCEEDINGS ON CREDITOR'S RIGHT TO INTEREST
Hanson, Fred T.
Citation analytics
How this journal article sits in the citation network, derived from CiteLaw's graph of published opinions.
Citations by decade
Courts citing this journal article
Most recently cited by2
- 1962McConnell v. Pacific Mutual Life Insurance Cal. Dist. Ct. App.
- 1943In re the Liquidation of the Chinese American Bank Haw.
Counts reflect decisions in the CiteLaw corpus and may lag very recent opinions.
Abstract
Where the claims of all creditors are of the same class and. assets are insufficient to pay in full the amount due on all claims when insolvency proceedings are begun, the general rule is that interest thereafter accruing will not be included in computing dividends on claims. The reasons usually given for this rule are: (a) The delay in payment is not the act of the debtor but is an act of the law for the mutual benefit of all the creditors. (b) In the case of claims bearing different rates of interest, it would be inequitable to permit the running of interest to increase the proportion of the assets to which some of the creditors are entitled at the expense of other creditors while the estate is in the process of administration. (c) If all claims bear the same rate of interest, the addition of interest would not change the proportion of the assets to which each would be entitled.
The computation may therefore be omitted as a useless act."'