Section 502, Title 11 of the U.S. Bankruptcy Code generally governs the allowance and disallowance of claims or interests asserted against a debtor’s bankruptcy estate. In particular, Subsection 502(d) expressly requires the disallowance of any claim asserted by an entity that has failed to return to the bankruptcy estate property recoverable pursuant to Chapter 5 of the Bankruptcy Code: If an entity improperly holds or fails to tender back to the debtor any property that is rightfully part of the debtor’s bankruptcy estate, any claim asserted against the estate by such entity must be disallowed.
On the other hand, Section 503(b) of the Bankruptcy Code allows a creditor to seek allowance of, and to recover, certain debts on administrative priority basis. Specifically, Subsection 503(b)(9) allows an entity to recover, as an administrative expense, “the value of any goods received by the debtor within 20 days before the date [of the debtor's bankruptcy] in which the goods have been sold to the debtor in the ordinary course of such debtor’s business.”
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