¹11 USC Sections 1011330 govern bankruptcy; Section 505 of that code governs tax claims.

²Consent from the voting majority of creditors is required when payment is for less than the full amount due.

³See, e.g., In re Pacific-Atlantic Trading Co., 64 F3d 1292 (9th Cir. 1995). This issue will be discussed in Part II, in the September 2003 issue.

⁴Secured claims are occasionally subordinated to the claims of the unsecured creditors when it is in the interest of justice to do so.

⁵Longer, if an offer-in-compromise has been filed.

⁶For example, in In re Airlift International Inc., 97 BR 664 (SD FL 1989), excise taxes assessed on failure to meet minimum-funding standards on employee pension plans were subordinated to the claims of general unsecured creditors. The court reasoned that the purpose of the excise tax was to punish employers for underfunding plans, but failing to subordinate this claim would actually punish unsecured creditors to the extent the tax reduced unsecured creditors recoveries.

⁷Missouri Dept of Rev. v. L.J. ONeill Shoe Co., 64 F3d 1146 (8th Cir. 1995).