We recently delivered a $382,901 check to a client in payment of a Bankruptcy Section 503(b)(9) claim, known as a “20-day administrative” claim. The claim arose from the client’s pre-petition sale of goods to its customer. General unsecured creditors received nothing.

Since 2005, when Section 503(b)(9) was added to the Bankruptcy Code, sellers of goods can assert an administrative priority claim for the prepetition sale of goods, if the goods were “received” by the debtor within 20 days prior to the Chapter 11 filing. When are goods “received” in an FOB mill sales contract? The answer is below.