Question :
11) A(n) ________ replaces the existing operating management of an : 1417823
11) A(n) ________ replaces the existing operating management of an insolvent firm with a selected creditor committee.
A) composition
B) creditor control
C) extension
D) liquidation
12) In a voluntary settlement, each creditor will be paid 20 cents on a dollar in 120 days. The remaining 80 cents on a dollar will be paid within an additional 60 days. This is an example of ________.
A) a composition
B) a combination of a composition and extension
C) an extension
D) a liquidation
13) In a voluntary settlement, each creditor will be paid only 45 cents on a dollar immediately. This is an example of ________.
A) a composition
B) a combination of a composition and extension
C) an extension
D) a liquidation
14) In a voluntary settlement, one group of creditors having claims of $1,000,000 will be immediately paid 95 cents on a dollar. The remainder of the creditors will postpone payment an additional 60 days. This is an example of ________.
A) a composition
B) a combination of a composition and extension
C) an extension
D) a liquidation
15) In ________, an assignment may be made by the creditors of an insolvent firm to a third party who then has the power to liquidate the firm's assets.
A) a voluntary private liquidation
B) a greenmail
C) an involuntary liquidation under Chapter Seven of the Bankruptcy Reform Act of 1978
D) a voluntary liquidation under Chapter Seven of the Bankruptcy Reform Act of 1978
16) Julie's Tanning Systems has an estimated liquidation value (after all prior claims have been satisfied) of $3,000,000, $1,500,000 from fixed assets, and $1,500,000 from current assets. The firm's value as a going concern is $4,000,000. The firm's current capital structure is as follows:
*Secured by fixed assets.
Prepare a table indicating the amount, if any, to be distributed to each claimant, in the event of liquidation.
