R8-M2 Bankruptcy 2

Question 1

what are objections to discharge?

Answer 1

• debtor not an individual. artificial entities such as corporations are dissolved so debts are wiped out
• fraudulent transfer or concealment of property:
• unjustifiable failed to keep books and records intentionally
• prior discharge within 8 years

Question 2

what happens after a reorganization plan is confirmed and a final decree closing the proceedings under chapter 11?

Answer 2

• the debtor is released from debts except as provided in the plan or by law
• the goal of chapter 11 is to allow the debtor’s business to continue, not dissolved
• the debtor remains in possession and NO trustee
• creditors’ committee if appointed is made up of unsecured creditors

Question 3

who can confirm and who can accept the reorganization plan under chapter 11?

Answer 3

• only court can confirm the plan
• 2/3 of interested shareholders (equity security holders) vote to accept the plan
• creditors: holding at least 2/3 in amount and more than 1/2 in number of allowed claims to accept the plan

Question 4

what actions are necessary for the court to confirm the reorganization plan under chapter 11?

Answer 4

• accepted by all impaired classes. still confirm if at least 1 impaired class has accepted
• providing for payment in full for priority administrative expenses and gap claims
• the plan is feasible (chance of succeeding)

Question 5

what is chapter 15 and its characteristics?

Answer 5

• commenced by a foreign representative filing a petition for recognition of a foreign proceeding
• automatic stay can take effect in the US
• foreign representative powers:
  + authorized to operate the debtor’s business
  + may participate in a pending US insolvency case
• discriminations against foreign creditors is prohibited, except certain foreign govt and tax claims which may be governed by treaty
• US courts must cooperate to the maximum extent possible with foreign court and foreign representatives

Question 6

what are order of distribution of debtor’s estate?

Answer 6

1. secured claimants
2. priority claimants: SAG WEG CTI (highest to lowest priority)
   + Support obligation owed to spouses and children
   + expenses of the bankruptcy Administration, including fees, court fees, trustee fees
   + claims (Gap) that accrue in the ordinary course of business after involuntary petition if filed
   + Wage claims of employees for sums earned within 180 days of bankruptcy up to $15,150
   + sums owed for Employee benefits up to whatever of the $15,150 above is left
   + claims on Grain farmers and fishermen up to $7,475
   + Consumer deposits up to $3,350
   + Tax claims
   + personal Injury claims arising from Intoxicated driving
3. general creditors who filed their claims on time