substantive consolidation
substantive consolidation
the combination of the estate of one debtor with the estate of one or more other debtors and the application of the combined estate to satisfy their combined liabilities. Substantive consolidation is often considered in the case of parent/subsidiary debtors and other affiliated entities (Glossary of Common Bankruptcy Terms)

Putting the assets and liabilities of two or more related debtors into a single pool to pay creditors. (Courts are reluctant to allow substantive consolidation since the action must not only justify the benefit that one set of creditors receives, but also the harm that other creditors suffer as a result.) (BankruptcyAction.com)

United Glossary of Bankruptcy Terms 2012.


Glossary of Bankruptcy.

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