1. Administrative expenses related to the filing of bankruptcy petition which includes court fees.

2. Claims by creditors that arises from the creditors’ ordinary course of business.
3. Wages earned by employees within 90 days of the bankruptcy petition. Maximum of $2000 per
employee.
4. Claims for contributions of employee benefits within 180 days from the filing of the bankruptcy
petition. Maximum of $2000 per employee.
5. Claims by customers who made cash deposits which the company have not yet rendered the
goods or services. Maximum of $900 per customer.
6. Taxes owed.
7. Unsecured claims filed by the creditors on time or late but without the creditors’ knowledge of
the bankruptcy.
8. Unsecured claims filed by the creditors who have knowledge of the bankruptcy.
9. Fines and punitive damages.
10. Interest accrued to claims after the filing of bankruptcy petition.

Types of bankruptcy

 Chapter 7 (Liquidation) – selling of the company assets

 Chapter 11 (Reorganization) – rehabilitation of the enterprise.

Forms of divestiture:

 Spin-off – a subsidiary or division if an enterprise forms an independent enterprise. Shares in the

new enterprise are distributed to the parent company’s shareholders in a pro rata basis.
 Equity curve-out – a public sale of stock in a subsidiary in which the parent company remains to
be the majority control.