bankruptcy rule
Defined in 1 dictionary — Case Law
Definitions from Case Law
From 331 U.S. 28 - United States Nat Bank in Johnstown v. Chase Nat Bank of New York City · 1947Most cited · 251 citing opinions
This rule, commonly known as the bankruptcy rule, is designed to preclude any unwarranted advantage from accruing to the secured creditor. Grounded upon the statutory principle of equality and ratable distribution, it prohibits the secured creditor from reaping the whole benefit of his security while simultaneously taking dividends from the general assets on the basis of his entire claim as if he had no security.