The article, “Two Tiers? Toys R Us Vendors Object to Differing Treatment” by Julie Schaeffer published in the April 2018, Volume 32, Number 4 issue of Turnarounds & Workouts, reports that numerous Toys R Us vendors are objecting to the bankrupt retailer’s proposal to create a two-tiered class of administrative claimants that would see secured lenders paid and leave vendors in the lurch. The publication, which provides news for people tracking distressed businesses, spoke with bankruptcy attorney and Birmingham partner Scott Williams about the issue.

“The position taken by the vendors is consistent with the Bankruptcy Code,” Williams says. “One of the key features of the Bankruptcy Code is that the treatment of similarly situated creditors should be treated the same. Creative lawyers have sought to artfully craft pleadings to work around this concept, but this bedrock principal was recently reaffirmed by the U.S. Supreme Court in the Jevic decision.”

Scott continued, “The dynamics of every bankruptcy case makes it too hard to predict what will happen in an individual case, but in principle all vendors should be treated equally.”