Question : 67.Within the bankruptcy process when debts exchanged for equity or : 1325825

 

 

67.Within the bankruptcy process when debts are exchanged for equity or the maturity of existing debts are extended, this is called

a.a recapitalization.

b.a reprioritization.

c.a refinancing.

d.none of the above

 

 

 

68.A cramdown procedure is used when

a.a reorganization plan fails to meet the standard for approval by all classes under the unanimous consent procedure.

b.the firm is clearly insolvent and the existing equity has no value.

c.either a or b

d.none of the above

 

 

 

69.Liquidation is seen as a means

a.of providing breathing space to viable firms that are in temporary financial distress.

b.of winding up the operations of firms that are not economically viable.

c.of punishing management of firms that have defrauded shareholders.

d.all of the above

 

 

 

70.Which of the following is (are) legally mandated subsidies to corporations in bankruptcy?

a.the ability to reject collective bargaining agreements

b.the right to cease the obligation to pay interest to prebankruptcy creditors

c.the right to terminate underfunded pension plans

d.all of the above

 

 

 

71.Which party is given the responsibility of liquidating a firm if it is necessary to do so?

a.the bankruptcy judge

b.the creditors of the firm

c.the bankruptcy trustee

d.the creditors committee

 

 

 

72.Bank A has debt that is backed with secured assets of Company B, who is currently liquidating its assets in bankruptcy. If Bank A is owed $10,000,000 and the liquidation of the assets will provide $8,000,000, then what happens to the remaining $2,000,000?

a.the $2,000,000 will be lost in the bankruptcy process

b.the $2,000,000 will have to be repaid through the automatic securitization of other assets

c.the $2,000,000 will become an unsecured or general credit amount in the liquidation process.

d.none of the above.

 

 

 

73.Which of the following claims is first to be paid in a Chapter 7 liquidation?

a.secured creditors

b.the federal government for taxes due

c.the expenses incurred by those administering the bankruptcy process

d.none of the above

 

 

 

74.Within Altman’s Z score model of predicting bankruptcy, the total value of the assets are included in the model. If the total value of the assets decreases what effect does that have on the probability of the firm being in bankruptcy?

a.increases

b.remains the same

c.decreases

d.it is impossible to determine since the value of the assets is only used as a parameter in the model

 

 

 

75.Within Altman’s Z score model of predicting bankruptcy, working capital is included in the model. If working capital increases what affect does that have on the probability of the firm being in bankruptcy?

a.increases

b.remains the same

c.decreases

d.it is impossible to determine

 

 

 

76.Which of the following terms describes when a firm is unable to pay its liabilities as they come due because assets cannot be converted into cash within a reasonable period of time?

a.bankruptcy

b.insolvency bankruptcy

c.liquidity crisis

d.economic failure

e.technical insolvency