Which of the Following Is True Regarding Bankruptcy

question 53

Multiple Choice

Which of the following is true regarding bankruptcy?

• A) Liquidation frequently is converted into a reorganization.
• B) In a prepack, creditors agree to a reorganization plan prior to the bankruptcy filing.
• C) Firms cannot file bankruptcy to escape long-term leases on closed stores.
• D) Creditors of the firm may not initiate bankruptcy proceedings.
• E) A party other than the current firm management must take control of the firm before it comes out of bankruptcy.

---

Definitions:

Corrections Corporation

A private company that manages and operates prisons and detention facilities on behalf of government agencies.

America

A term commonly referring to the United States, a country in North America known for its significant influence on global culture, economy, and politics.

Private Prison Provider

A company or organization that operates prisons on behalf of the government but is privately owned and profit-driven.

Privatization

The process of transferring ownership or operation, particularly of public services or assets, to private sector entities.