The process of organizing, ranking, and distributing funds in a manner set forth by law as being the most effective way to discharge debts that are owed to various creditors.
When assets and securities are marshalled, the two-fund doctrine is frequently applied. It provides that when one claimant has two possible funds in the hands of a debtor to whom the claimant is able to resort to satisfy his or her demand, and a second claimant has an interest in only one of the funds, the second claimant can force the first to satisfy the claims out of the fund in which he or she, the second claimant, has no lien.
