substantive consolidation
- An act of merging the assets and liabilities of two or more related debtors to repay creditors, a measure often cautiously administered due to potential harm to certain creditors
- Due to their closely intertwined finances, substantive consolidation was considered for the two companies.
- The judge was hesitant to approve the substantive consolidation because it could negatively impact some creditors.
- Substantive consolidation could provide a way to fairly distribute the assets of the bankrupt firm among its creditors.
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