Magic Mobile Homes Is to Be Liquidated

question 9

Multiple Choice

Magic Mobile Homes is to be liquidated.All creditors, both secured and unsecured, are owed €2 million.Administrative costs of liquidation and wages payments are expected to be €500,000.A
Sale of assets is expected to bring €1.8 million after all costs and taxes.Secured creditors have a
Mortgage lien for €1,200,000 on the factory which will be liquidated for €900,000 out of the sale
Proceeds.The corporate tax rate is 34%.How much and what percentage of their claim will the
Secured creditors receive, in total?

• A)€ 900,000; 75%
• B)€ 981,818; 81.82%
• C)€1,009,091; 84.1%
• D)€1,200,000; 100%
• E)Not enough information to answer.

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