John, B can’t recover…
John,
B can’t recover it from A because once recovered by A, it belongs to her.
This is no different from any other situation in which assets on hand aren’t sufficient to cover all the debts that are out.
If I take out $100,000 in loans each from A and B and then default, but I can only pay back $20,000, then there’s no way for me to pay back everything I owe. But if I pay back $20,000 to A and nothing to B, B has no right to take the $20,000 from A on the grounds that it’s really her money.
Similarly, if I steal $1,000 from you and another $1,000 from Lopez, then blow $1,500 in Vegas before you catch me, you’re still entitled to recover $500 from me. You’re not obliged to turn over all of it, or part of it, to Lopez, and he’s not entitled to take it from you.
Anticopyright.