Natasha Runs a Lingerie Business That Caters to a Select

question 9

Multiple Choice

Natasha runs a lingerie business that caters to a select crowd. Notwithstanding her valiant efforts at promotion, the lingerie business goes nowhere and she's left saddled with over $100 000 in debt. She would like to continue operating, at least for a while, and makes a proposal to creditors. She puts all creditors owed $1000 dollars or less in one class, puts her two large secured creditors in their own categories, and the preferred creditors in a third class. Is it likely that her proposal will succeed?

• A) Yes, so long as Natasha promises that if the proposal does not work she will assign herself into bankruptcy.
• B) No, because Natasha is not allowed to classify all creditors.
• C) Yes, so long as all creditors are fully satisfied.
• D) Yes, so long as the secured creditors are not secured against the same assets and are fully satisfied in the proposal, and her creditors do not object to the classification as unfair.
• E) No, because Natasha has too much debt to be able to make a proposal to creditors.

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Definitions:

Functional Fixedness

A mental shortcut that restricts an individual to employing an item solely in its conventional manner, obstructing innovative thinking and the ability to solve problems.

Availability Heuristic

A cognitive bias where people judge the likelihood of events based on how easily examples come to mind.

Elimination-by-aspects Strategy

A decision-making process where choices are sequentially eliminated based on whether they fail to meet certain criteria.

Alternate Outcomes Analysis

A decision-making process that involves considering different possible outcomes to evaluate the effectiveness of decisions.