Karim Manji Owns a Small Electronics Business That Is Starting

question 1

Multiple Choice

Karim Manji owns a small electronics business that is starting to lose money because a big box store opens nearby. Knowing that the business is about to go under, he uses the business's cash on hand to pay one of his creditors, Sushil Manji his cousin. A week later, insolvent, he files for bankruptcy. Which of the following is true respecting the payment to Manji?

• A)It is a fraudulent conveyance
• B)It is a fraudulent preference because Sushil is a non arms length party
• C)It is a fraudulent preference because Sushi is one of several creditors
• D)It is not a fraud of either type because Karim actually owed the money to Sushil
• E)Both B and C

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Definitions:

Intrinsic Value

The perceived or calculated value of a company, currency, or asset based on its true fundamental value, excluding market fluctuations.

Market Value

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