marshalling of assets

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A process in which the claims of different creditors are directed towards different funds of the same debtor in an attempt to reach a fair result. When there are two creditors and two funds, and one has a claim exclusively on one fund but the other can claim against either fund, the rule of marshalling requires the latter to claim against the fund from which the former is excluded. The aim is, so far as possible, to allocate the assets so as to satisfy all the creditors.

Subjects: Law.

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