When a Business Becomes Insolvent, It Generally Has Three Possible

question 7

Multiple Choice

When a business becomes insolvent, it generally has three possible courses of action. Which of the following is NOT one of the three possible courses of action?

• A) The debtor and its creditors may enter into a contractual agreement, outside of formal bankruptcy proceedings.
• B) The debtor continues operating the business in the normal course of the day-to-day operations.
• C) The debtor or its creditors may file a bankruptcy petition, after which the debtor is liquidated under Chapter 7.
• D) The debtor or its creditors may file a petition for reorganization under Chapter 11.

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Definitions:

Trickle Down

An economic theory that suggests benefits for the wealthy will "trickle down" to everyone else, improving the economy as a whole by promoting investment and spending.

Moral Intensity

The perceived importance or magnitude of the ethical implications in a given situation or decision, influencing moral judgments and actions.

Distributive Justice

The perceived fairness in the allocation of resources or rewards within a group or organization, impacting individuals' satisfaction and motivation.

Utilitarianism

A moral theory stating that the best action is the one that maximizes utility, typically defined as that which produces the greatest well-being of the greatest number of people.