During dissolution, creditor payments are made in accordance with the contract and Civil Code rules on priority of credits.

During dissolution, creditor payments are made in accordance with the contract and Civil Code rules on priority of credits.

• A. True
• B. False
• C. Not specified
• D. Depends

Answer: (A)

During dissolution, the available assets are allocated to creditors in a fixed order defined by the Civil Code’s priority of credits. Secured creditors are paid from the collateral that secures their claim, followed by preferred creditors (such as certain employee or tax claims), then ordinary unsecured creditors; any remaining assets go to the shareholders. Contracts can influence the treatment of secured interests and thus affect the payout to those creditors, but they do not override the statutory priorities for general claims. Therefore, creditor payments are made in accordance with both applicable contract terms (where relevant) and the Civil Code rules on priority of credits.

During dissolution, the available assets are allocated to creditors in a fixed order defined by the Civil Code’s priority of credits. Secured creditors are paid from the collateral that secures their claim, followed by preferred creditors (such as certain employee or tax claims), then ordinary unsecured creditors; any remaining assets go to the shareholders. Contracts can influence the treatment of secured interests and thus affect the payout to those creditors, but they do not override the statutory priorities for general claims. Therefore, creditor payments are made in accordance with both applicable contract terms (where relevant) and the Civil Code rules on priority of credits.