Federal bankruptcy law deal only with corporate bankruptcies

Assignment Help Financial Management

Reference no: EM131021570

Which of the following statements is most CORRECT?

a. Federal bankruptcy law deals only with corporate bankruptcies. Municipal and personal bankruptcy are governed solely by state laws.

b. All bankruptcy petitions are filed by creditors seeking to protect their claims against firms in financial distress. Thus, all bankruptcy petitions are involuntary as viewed from the perspective of the firm's management.

c. Chapters 11 and 7 are the most important bankruptcy chapters for financial management purposes. If a reorganization plan cannot be worked out under Chapter 11, then the company will be liquidated as prescribed in Chapter 7 of the Act.

d. "Restructuring" a firm's debt can involve forgiving a certain portion of the debt, but it cannot call for changing the debt's maturity or its contractual interest rate.

e. Our bankruptcy laws were enacted in the 1800s, revised in the 1930s, and have remained unaltered since that time.

Reference no: EM131021570

Questions Cloud

Develop research and analytical skills : Develop research and analytical skills, applied to understanding the role of managers and their impact on organisations.

Account starts at the initial margin requirement : You’ve borrowed $20,000 on margin to buy shares in Disney, which is now selling at $50 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to $48 per share. a. ..

What will be your rate of return if price of telecom stock : The current market price is $250 per share, and you have $22,000 of your own to invest. You borrow an additional $22,000 from your broker at an interest rate of 6% per year and invest $44,000 in the stock. What will be your rate of return if the pric..

What is the price of the bond-compounding periods : You find a zero coupon bond with a par value of $10,000 and 17 years to maturity. If the yield to maturity on this bond is 4.9 percent, what is the price of the bond? Assume semiannual compounding periods.

Federal bankruptcy law deal only with corporate bankruptcies : Federal bankruptcy law deals only with corporate bankruptcies. Municipal and personal bankruptcy are governed solely by state laws. All bankruptcy petitions are filed by creditors seeking to protect their claims against firms in financial distress. T..

Distribution of assets in a liquidation : What would be the priority of the claims as to the distribution of assets in a liquidation under Chapter 7 of the Bankruptcy Act? 1 is the highest claim, 5 is the lowest.

The primary test of feasibility in a reorganization : The primary test of feasibility in a reorganization is whether every claimant agrees with the reorganization plan. The basic doctrine of fairness states that all debt holders must be treated equally. Since the primary issue in bankruptcy is to determ..

What term is this loan being paid : A pottery factory purchases a continuous belt conveyor kiln for $68,000. A 6.3% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $765.22, over what term is this loan being paid?

User Account

All Pages