The Following Is True Regarding Secured Creditors in Bankruptcy Proceedings

question 34

Multiple Choice

The following is true regarding secured creditors in bankruptcy proceedings.

• A) Through agreement, they may accept the security itself in settlement of their account.
• B) They immediately follow the preferred creditors in ranking of priority.
• C) They must pay the other secured creditors any surplus in the value of their security.
• D) Any deficit in the value of the secured property is directly made- up by the general creditors.
• E) They are not governed by the Bankruptcy and Solvency Act.

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Definitions:

UCC

In the United States, the Uniform Commercial Code is a detailed compilation of statutes that regulate commercial dealings.

Stopping Delivery

Halting the shipment of goods, often by the seller, under specific circumstances outlined in a sales or shipping agreement.

Cover

To provide protection against something, such as insurance coverage protects against specific risks.

Non-breaching Buyers

Buyers who have fulfilled their contractual obligations and have not violated the terms of the contract.