Bankruptcy Ct. did not err in rejecting debtor-employer’s objection to creditors-Welfare, Pension and Annuity Funds’ claims under section 507(a)(5) of Bankruptcy Code for priority status of their claims, where debtor had failed to make required contributions to said Funds prior to filing for Chapter 11 bankruptcy. Section 507(a)(5) allows for said priority up to certain level, and issue in case concerned whether said limitation applied to each Fund that seeks unpaid contributions, or if claims of all three Funds sponsored by instant bankrupt employer must be aggregated into one claim to which limitation cap applied. Text of section 507(a)(5) allowed each Fund to file instant priority claim for services rendered, and record showed that each Fund’s individual priority claim was within section 507(a)(5)(B)’s limitation. As such, each Fund was allowed to claim instant priority under section 507(a)(5).
Federal 7th Circuit Court
Civil Court
Bankruptcy