Ranking of Claims
The proceeds of bankruptcy are distributed according to the ranking of claims, which in the order of precedence are:
- Secured claims
- Non-secured first-class claims: which are in principle limited salary claims of employees, certain claims against professional welfare funds and certain claims for family-related assistance
- Non-secured second-class claims: which are in principle limited to unpaid social security contributions and protected deposits with banks
- Non-secured third-class claims: all other claims
- Subordinated claims: pro memoria
See full description of ranking of claims here.
Risk of Clawback
A creditor risks a clawback action if it has concluded transactions with the debtor in the past five years prior to the opening of bankruptcy proceedings that are knowingly disadvantageous to creditors in general, or for the benefit of individual creditors (fraudulent conveyance).
The creditor also risks a clawback action if in the year prior to the bankruptcy of the debtor it has entered into transactions such as requiring a security for an unsecured debt without prior respective obligations, requiring satisfaction of a money claim other than by usual methods of payment, and seeking payment of claims that are not yet due, while the debtor was indebted. The transaction will not be set aside if the beneficiary can demonstrate that it neither knew nor ought to have known that the debtor was over-indebted.
Read more about Clawback here.