Shutdown Delays Payouts to Bankruptcy Creditors - ABI

The partial government shutdown is delaying payments from collapsed companies to former workers and other creditors who weren’t paid during a business’s final days of operation, WSJ Pro Bankruptcy reported. The country’s bankruptcy trustees, who are in charge of sending out those payments after a business files for chapter 7 protection, aren’t able to get approval for payment plans from the Justice Department, which supervises the payout process. The shutdown threatens to delay the already long process of paying a bankrupt company’s final bills, which can take months. Trustees made more than $2 billion worth of payments in 2016 to creditors of more than 43,000 bankruptcy cases, according to latest data from the Justice Department.

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