Bankruptcy

Question 1

What is the purpose of Chapter 11?

Answer 1

Is to keep the financially trouble firm in business.

Question 2

Avoidance: Enables trustee to obtain return of debtor’s property
His attempt to transfer the property caused a FLAP

Answer 2

1- Fraudulent transfers by debtor w/I 2 years of the filing of the petition.
2- Liens by statute
3- After-filing date transfers means after filing the petition, a transfer was made by debtor
4- Preferential transfer of property or voidable preferences

Question 3

What is voidable preferences? I-WAIT or NO PIE

Answer 3

1- Debtor was Insolvent when the transfer was made
2- W/I 90 days of the filing of the petition
3- For an Antecedent debt (pre-existing debt), new value is OK
4- Improves the creditors position (Creditor get more money than would have gotten in bankruptcy)
5- Time is increased from 90 days to 1 year for an insider.

Question 4

What are Not preferential transfers? (C-CONAC)

Answer 4

1- Charity?

2- Consumer debt

Question 5

What is voidable preferences? NO PIE

In essence, the transferee gets NO PIE and must return the debtor’s property

Answer 5

• Within Ninety days of filing of petition if to a noninsider
• Within )ne year of filing if to an insider
• For a Pre-existing (antecedent) debt
• While the debtor is Insolvent
• When the transfer Exceeds the amount that the creditor would obtain through bankruptcy

Question 6

What acts can bar a general discharge in a bankruptcy?

Answer 6

1- Failing to explain a loss of assets that should have ended up in the estate.
2- Making false claims against the estate
3- Taking out bankruptcy 3 years earlier