M2-Bankruptcy: Part 2

Question 1

Late claims are paid only if there is money left over after the general unsecured creditors whose claims were timely filed are paid. (true or false)

Answer 1

true

Question 2

With respect to distributing assets from a bankruptcy estate,all secured claims are first paid; then priority claims are paid and finally the remaining assets are split proportionally among the unsecured creditors who have timely filed a claim. (true or false)

Answer 2

true

Question 3

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. (true or false)

Answer 3

true

Question 4

Debts arising from negligent conduct are dischargeable in bankruptcy. (true or false)

Answer 4

True

If the auto accident arose from drunk driving or the injuries were willful, the debt would not be discharged.

Question 5

Bankruptcy Code section 727(d) sets out the reasons for revoking a discharge. The grounds include failing to answer a material question on the bankruptcy petition if the question has been approved by the court, unless the fifth amendment privilege against self-incrimination is appropriately claimed. (true or false)

Answer 5

true

Under the liquidation provisions of chapter 7 of the federal bankruptcy code, a debtor will be denied a discharge in bankruptcy if the debtor refuses to explain satisfactorily a loss of assets.

Question 6

A trustee usually is not appointed in a reorganization. (true or false)

Answer 6

true

The Corp has the right to file the first plan of reorganization, but creditors can also file a plan.

In a reorganization there is a presumption that the debtor will remain in possession.

The creditors’ committee, if appointed, is made up of unsecured creditors.

Question 7

A foreign entity may file an ancillary proceeding under Chapter 15, and may also file a proceeding under Chapters _______

Answer 7

7&11

Question 8

Although discrimination against foreign interests generally is prohibited, discrimination is allowed with regard to certain foreign government tax liens. (true or false)

Answer 8

true

Question 9

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). (true or false)

Answer 9

true

All unimpaired classes do not need to accept the plan if: (1) at least one impaired class has accepted the plan and (2) the plan does not discriminate unfairly and is fair and equitable to all impaired classes.

Question 10

The class, unsecured creditor, includes the unsecured portion of collateralized debt where the collateral was insufficient. (true or false)

Answer 10

true

Question 11

A debt incurred through a fraud on a specific creditor,e.g., by making a false representation to the creditor, is a nondischargeable debt. (true or false)

Answer 11

true

Question 12

While a corporation or a partnership may voluntarily or involuntarily be petitioned into a Chapter 7 bankruptcy, a corporation or a partnership is _________, while an individual is _________.

Answer 12

dissolved

discharged

Question 13

Employees have a fourth priority for salary claims to the extent of $12,850 per claimant with respect to wages earned within 180 days prior to bankruptcy and, thus, will be paid after the secured creditors are paid. However, there is no guarantee that the employees will be paid in full. (true or false)

Answer 13

true

Question 14

Tax claims have an eighth priority, they are not treated as secured, they are paid before general creditors. (true or false)

Answer 14

true