business organizations

In the law of corporations, describes decision by a court to subordinate a controlling shareholder’s claims upon debt owed her by her own firm, to those of other  “outside” (i.e., bona fide third party) creditors in bankruptcy.

Under common law, in determining the extent to which partnership creditors whose debts are not fully satisfied by partnership property can assert claims to the assets of individual partners, the Jingle Rule gave partnership creditors priority in all partnership assets and assigned first priority to the separate creditors of individual partners in the individual assets of those partners. This approach was later modified under the Revised Uniform Partnership Act.