Chapter 11 - Banking, Creditors, Bankruptcy

Question 1

Debt Financing

Answer 1

borrowing capital for a period of time and repaying plus interest according to loan agreement

Question 2

Equity Financing

Answer 2

selling shares in a corporation to investors

Question 3

Security Interest

Answer 3

an interest in personal property that secures the payment of a debt

Question 4

Security Agreement

Answer 4

an agreement that sets out the rights and obligations of the borrower and lender

Question 5

Floating Charge

Answer 5

a security interest on a class of collateral that allows the debtor to dispose of, replace, and add to the assets in that class

Question 6

Guarantor

Answer 6

an individual who agrees to pay the debt of another person if that person defaults

Question 7

Insolvent vs Bankrupt

Answer 7

I: financial status
B: legal status

Question 8

Unsecured Creditors

Answer 8

shares in the total remaining proceeds from the sale of the debtors estate after payment to preferred creditors