Ch. 7 Financial Restructuring and Bankruptcy Flashcards
A company’s public float =
Outstanding shares - restricted stock
Can a company negotiate with its creditors prior to filing for bankruptcy?
Yes
In a Chapter 11 bankruptcy, the ____ company is in control of the assets and is referred to as the ______.
Filing company in control of assets and is referred to as Debtor Inpossession (DIP)
A ______ is considered to be approved by a class of creditors if at least ____ of the dollar amount of the claims and more than _____ of the total number of creditors in the class has approved of the plan.
Reorganization plan; 2/3rds of dollar amount of claims and 1/2 of total number of creditors
An ____ class of creditors includes those that will not receive the full amount owed, while an _____ class of creditor includes those that will be paid in full.
Impaired- will not receive full amount
Unimpaired- will receive full amount
Only ______ creditors vote on a reorganization plan.
Impaired
Provided at least ONE class approves the plan, despite the objections of SOME classes of creditors, a _____ allows a bankruptcy court to approve the plan and considers it to be fair to all classes of creditors.
Cramdown
In a \_\_\_\_\_ liquidation, an entire class of creditors must be paid in-full before the next class receives anything. If one class is not paid in-full, then creditors will be paid on a \_\_\_\_\_ basis and claims below that class will receive \_\_\_\_\_.
Chapter 7; pro rata; nothing
T/F: As it relates to payments in bankruptcy, administrative expenses have priority over most creditors.
True
Perfecting a lien is done by the _____ creditors, NOT the _____ creditor’s committee
Secured creditors; not the unsecured
______ holders are paid after unsecured debt, but before preferred or common stockholders
Subordinated debenture holders
In a ____ sale, the stalking horse bidder provides the lead bid and will purchase assets in a bankruptcy
363 bid
