M2 Bankruptcy: Part 2 Flashcards
MCQ-01897
Rolf, an individual, filed a voluntary petition in bankruptcy. A general discharge in bankruptcy will be denied if Rolf:
Unjustifiably failed to preserve Rolf’s books and records.
A voluntary petition in bankruptcy will be denied if the debtor failed to keep or preserve adequate books and records.
MCQ-10997
Chapter 7 of the federal Bankruptcy Code will deny a debtor a discharge when the debtor:
Is a corporation or a partnership.
While a corporation or a partnership may voluntarily or involuntarily be petitioned into a Chapter 7 bankruptcy, a corporation or a partnership is “dissolved,” while an
individual is “discharged.”
MCQ-01837
A claim will not be discharged in a bankruptcy proceeding if it:
Arises from an extension of credit based upon false representations by the debtor to the creditor.
A debt incurred through a fraud on a specific creditor, e.g., by making a false representation to the creditor, is a non-dischargeable debt.
MCQ-01368
Which of the following claims will not be discharged in bankruptcy?
A claim that arises from alimony or maintenance.
Money owed as alimony is not discharged in bankruptcy
MCQ-12512
Jones files for protection under Chapter 7 of the federal Bankruptcy Code. Which of the following debts will be discharged?
A secured claim by a creditor relating to Jones’ purchase of an appliance.
Secured claims are discharged in bankruptcy because the secured creditor is given the collateral or the value of the collateral to the extent of the debt owed.
MCQ-10993
Robin Corp. incurred substantial operating losses for the past three years. Unable to meet its current obligations, Robin filed a petition for reorganization under Chapter 11 of the federal Bankruptcy Code. Which of the following statements is correct?
A creditors’ committee, if appointed, will consist of unsecured creditors.
The creditors’ committee, if appointed, is made up of unsecured creditors.
MCQ-01373
Under the reorganization provisions of Chapter 11 of the U.S. Bankruptcy Code, after a reorganization plan is confirmed, and a final decree closing the proceedings entered, which of the following events usually occurs?
A reorganized corporate debtor will be discharged from all debts except as otherwise provided in the plan and applicable law
After the reorganization plan is confirmed, the debtor is released from debts except as provided in the plan or by law.
MCQ-10991
Strong Corp. filed a voluntary petition in bankruptcy under the reorganization provisions of Chapter 11 of the federal Bankruptcy Code. A reorganization plan was filed and agreed to by all necessary parties. The court confirmed the plan and a final decree was entered. Which of the following parties ordinarily must confirm the plan?
- 1/2 of the secured creditors
- 2/3 of the shareholders
No; No
Technically, only the court can confirm a plan; creditors and security interest holders vote whether to accept the plan. Moreover, unimpaired parties, such as secured creditors are
presumed to have affirmed, so their vote is not necessary. A plan need not be affirmed by 2/3 of interested shareholders (called “equity security holders” under the Bankruptcy Code), but rather by 2/3 of the interests (e.g., 2/3 of the outstanding shares, which may be held by fewer than 2/3 of the shareholders). Finally, through the “cram down” provision of the Bankruptcy Code a plan may be confirmed by a court even if only one impaired class votes to affirm the plan.
MCQ-10995
Under Chapter 11 of the federal Bankruptcy Code, which of the following actions is necessary before the court may confirm a reorganization plan?
Provision for full payment of administration expenses.
A reorganization plan under Chapter 11 will not be approved unless the plan provides for the full payment of administration expenses (and for full payment to certain other classes of creditors, too).
MCQ-06810
Which, if any, of the following statements are true under Chapter 15 of the United States Bankruptcy Code?
I. A foreign entity may file only under Chapter 15.
II. The automatic stay is not available under Chapter 15.
Neither I nor II
A foreign entity may file an ancillary proceeding under Chapter 15, and may also file a proceeding under Chapter 7 or Chapter 11. Thus, I is not true. The automatic stay arises after a petition for recognition is granted by the court. Thus, II is not true.
MCQ-06811
Which of the following statements is not true under Chapter 15 of the United States Bankruptcy Code?
Discrimination against foreign interests is never allowed.
This statement is not true. Although discrimination against foreign interests generally is prohibited, discrimination is allowed with regard to certain foreign government tax liens.
MCQ-10992
Strong Corp. filed a voluntary petition in bankruptcy under the reorganization provisions of Chapter 11 of the federal Bankruptcy Code. A reorganization plan was filed and agreed to by all necessary parties. The court confirmed the plan and a final decree was entered.
Strong Corp. will be discharged from all its debts and liabilities that arose before the confirmation of the plan, except as otherwise provided in the plan, the order of confirmation, or the Bankruptcy Code.
Under the Bankruptcy Code, the court’s final decree results in a discharge of all debts and liabilities that arose before confirmation of the plan, except as otherwise provided in the
plan, the order of confirmation, or the Bankruptcy Code.
