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?

 

The financier who is willing to provide the new money to the insolvent corporate borrower shall be protected and given priority over other existing creditors only when such new money is given according to the rehabilitation plan under Article 90 of the Bankruptcy Act. Otherwise, such creditors will not be protected.