How would burger-r-us benefit from filing bankruptcy under

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Reference no: EM133665707

Assignment:

Burgers-R-Us runs a chain of fast food restaurants throughout Northern and Southern California on land leased from various landlords. Its balance sheet reflects assets that include 30 long term leases of real property acquired over 10 years ago, office furniture and equipment in its corporate headquarters valued at $200,000 inventory and supplies valued at $250,000 and trademarks, associated items of intellectual property and goodwill valued at $300,000. Many of its locations are unprofitable, and several have been closed. Burgers-R-Us has been served with 3-day notices to quit and, in some instances, unlawful detainer complaints with regard to stores for which it stopped paying rent. Burgers-R-Us' liabilities include:

Trade payables of $500,000,

A $1,000,000 loan from James Jones, its majority shareholder, originally unsecured when made, but 10 months ago the company secured it by inventory.

Unpaid taxes of $250,000

How would Burger-R-Us benefit from filing bankruptcy under?
How would Jones' claims be treated?

Reference no: EM133665707

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