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| SECTION U - LIQUIDITY PROBLEMS |
| If it was necessary to provide urgently needed cash (or liquidity) to enable the business of an insolvent corporate borrower to survive, how could a financier who was willing to provide this "new money" be protected and given priority over other existing creditors? |
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The procedures of having a valid security as mentioned in P5 (b) should be complied with to have a priority in case of reorganization, composition or special liquidation. In case of bankruptcy, the new money borrowed by the trustee in bankruptcy may enjoy the priority over the other unsecured claims following the bankruptcy procedures. |
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