The Law Dictionary

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PREFERENCE Definition & Legal Meaning

Definition & Citations:

The act of an insolvent debtor who, in distributing his property or in assigning it for the benefit of his creditors, pays or secures to oue or more creditors the full amount of their claims or a larger amount than they would be entitled to receive ou a pro rata distribution. Also the right held by a creditor, in virtue of some lien or security, to be preferred above others (i. e., paid first) out of the debtor’s assets constituting the fund for credit- ors. See Pirie v. Chicago Title & Trust Co., 182 U. S. 438, 21 Sup. Ct 906, 45 L. Ed. 1171; Ashby v. Steere, 2 Fed. Cas. 15; Chadbourne v. Harding, 80 Me. 580, 10 Atl. 248; Chism v. Citizens’ Bank, 77 Miss. 599, 27 South. 637; In re Ratliff (D. C.) 107 Fed. 80; In re Stevens, 38 Minn. 432, 38 N. W. 111.

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