Beware of Attempts to Loot § 503 (b) (9) Expenses Through Preference Exposure

Holders of allowed § 503 (b) (9) expenses are generally entitled to payment under a confirmed chapter 11 plan and prior to any recovery by lower-priority claims. Often in chapter 11 cases where the case might be teetering on the verge of administrative insolvency, the debtor might attempt to reduce liability to pay § 503 (b) (9) expenses, which, in turn, will reduce the amount of administrative expenses that the debtor will need to pay in order to increase the likelihood of a confirmable chapter 11 plan.

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