rule of marshaling assets
rule of marshaling assets. An equitable doctrine that requires a senior creditor, having two or more funds to satisfy its debt, to first dispose of the fund not available to a junior creditor. • It prevents the inequity that would result if the senior creditor could choose to satisfy its debt out of the only fund available to the junior creditor and thereby exclude the junior creditor from any satisfaction. — Also termed marshaling doctrine; rule of marshaling securities; rule of marshaling remedies. [Cases: Debtor and Creditor 13. C.J.S. Assignments for Benefit of Creditors § 27; Creditor and Debtor §§ 110–112, 114, 118–119.]
