Mandatory Subordination Does Not Compel Claim Disallowance and Does Not Apply to Individual Debtors

In Khan v. Barton (In re Khan), CC-14-1021-TaDKi, CC-14-1041-TaDKi, CC-14-1062-TaDKi (9th Cir. BAP Dec. 9, 2014), the Bankruptcy Appellate Panel of the United States Court of Appeals for the Ninth Circuit (the “BAP”) held that mandatory subordination of a claim under Bankruptcy Code Section 510(b) does not compel disalowance of the claim and does not apply to individual debtors. Read more here:
Reno F.R. Fernandez III is a partner with Macdonald Fernandez LLP, a California bankruptcy, turnaround, insolvency and litigation firm. Check us out at