Concerned That the Chapter 11 Bankruptcy Procedures Were Harming the Creditors

question 35

Multiple Choice

Concerned that the Chapter 11 bankruptcy procedures were harming the creditors of small businesses,Congress added some provisions in 2005 to change the process for businesses with less than $2 million in debt.Which of these provisions was included in that revision?

• A)Small businesses have only 21 days to file a reorganization plan.
• B)Small businesses do not have to declare debts of less than $5,000.
• C)The courts have only 45 days to confirm or reject the plan or reorganization.
• D)All creditors of small businesses are treated as equals and proceeds are distributed proportionately to secured and unsecured creditors.

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Definitions:

Investment Opportunities

Options available to individuals and firms to invest capital with the intent to generate returns.

Bargain Purchases

Acquisitions made at a price significantly below the fair market value of the asset, resulting in an immediate gain for the purchaser.

Dividend Capture

A strategy in which an investor purchases securities to own them on the day of record and then quickly sells them; designed to attain dividends but avoid the risk of a lengthy hold.

Securities

Securities that signify ownership in a corporation listed on the stock market, a debt obligation with a government entity or company (bond), or entitlements to ownership through an option.