What are some examples of pro rata in bankruptcy law?
Jan Meriss Alfonso Assistant at Ascent Law LLC Examples of Pro-Rata in Bankruptcy Law Pro-rata is a distribution method that works among similarly situated Creditors. It determines how much of a bankruptcy estate a Creditor can receive. It also takes into account the total claim size of the Creditor class. The amount that each Creditor receives depends on the size of their allowed bankruptcy claims. Transfers of specifically identifiable commodity contracts One example of pro-rata in bankruptcy law involves transfers of specifically identifiable commodity contracts. This type of transfer involves the division of the total amount of property held in a commodity contract by the number of units in that commodity contract. The transfers can be one or more. Pro rata distribution is a central theme in the Bankruptcy Code's commodity broker provisions, which are located in chapter 7. Under this section, public customers of commodity brokers can share in the shortfall if there is a diffe...