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U.S. 7th Circuit Court of Appeals

IN THE MATTER OF KMART CORP. (02/24/04 – No. 03-1956)

Bankruptcy judge erred in permitting debtor to pay in full its pre-petition debts to any vendor deemed “critical” in its unilateral estimation. Preferential payments to a class of creditors are proper only if the record shows the prospect of benefit to the other creditors.

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