Before any distribution, claims filed against the insolvent company are reviewed as to their basis, amount, due date, and any existing security interests. The outcome must be clearly documented in the register of creditors as accepted, partially accepted, or disputed. As a rule, distribution is based on accepted claims and their legal classification. The priority of a claim determines the order in which creditors are paid from the company’s realized assets. In doing so, existing security interests, applicable priority rules, and the proceeds actually available must be taken into account. If the insolvency estate is insufficient to pay all claims in full, the available amount limits distributions. Once realization is complete, an accounting of the proceeds and any procedural costs still to be taken into account provides the basis for the final distribution. For each creditor, the distribution plan should state the accepted claim, its priority, the basis for the calculation, and the proposed payment amount. Disputed or unresolved claims must be handled according to their procedural status and must not inadvertently be included in the distribution. Proof of payment and a final accounting make the payments to creditors verifiable.
Distribution of a Company’s Insolvency Estate in Bankruptcy Proceedings in Georgia
Distribution in Georgian Bankruptcy proceedings requires verified creditor claims, a legally correct order of priority, and confirmed available proceeds. Creditors are not paid solely according to the amount of their claims; security interests, claim priority, and procedural costs still to be deducted also matter.
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