Which of the Following Is False with Respect to the Distribution

question 46

Multiple Choice

Which of the following is false with respect to the distribution of assets following dissolution of a limited liability company?

• A) Most statutes provide default rules for distributing the assets.
• B) Generally,assets are distributed first to creditors,including members and managers who are creditors,except with respect to liabilities or distributions.
• C) Generally,assets are distributed to members and former members in satisfaction of liabilities for unpaid distributions after distributions are made to creditors,including members and managers who are creditors.
• D) Generally,assets are distributed first to creditors who are not members or managers.

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Definitions:

Poison Pill

Shareholder rights provisions that allow existing shareholders in a company to purchase additional shares of stock at a lower than market value if a potential acquirer purchases a controlling stake in the company.

Corporate Restructuring

The process of significantly changing a company's business model, organizational structure, or financial structure, often in response to financial pressures.

Horizon Value

The estimated value of a company or investment at the end of a specific period, taking into account future cash flows or income it will generate.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.