Problem

1. Bankruptcy Insolvency means:a Book value of assets is greater than liabilitiesb Fair va...

1. Bankruptcy Insolvency means:

a Book value of assets is greater than liabilities

b Fair value of assets is less than liabilities

c Inability to meet financial obligations as they come due

d Liabilities are greater than book value of assets

2. Aside from liability discharge provided for in the reorganization plan, the discharge of a debtor corporation’s liabilities occurs when:


a The plan is accepted by a majority of unsecured creditors

b Each class of claims has accepted the plan or is not impaired under it

c Each holder of a claim has accepted the plan or will receive at least as much as if the company were liquidated

d The court confirms that the plan is fair and equitable


3. A trustee’s election in a Chapter 7 case requires:

a Approval by a majority of creditors

b Approval by a majority of claims represented

c Approval by a majority in dollar amount of voting creditors, and at least 20 percent of claims must vote

d Approval of two-thirds in dollar amount and a majority of holders of all claims


4. A corporation may not be a debtor in possession if:

a The case is initiated in a voluntary filing

b The case is initiated in an involuntary filing

c Loans other than for goods and services exceed $5,000,000

d The court concludes that appointment of a trustee is in the best interests of creditors

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Solutions For Problems in Chapter 18