Which of the Following Would Not Be Considered a Fraudulent

question 36

Multiple Choice

Which of the following would not be considered a fraudulent conveyance or a voidable preference under the provisions of the Code? Immediately prior to filing bankruptcy:

• A) debtor sells assets well below fair market price to Freddie, a friend.
• B) debtor sells his car at a public auction, thinking that it would bring a decent price, but the car brings an amount well below fair market value.
• C) debtor's corporation transfers assets to stockholders in lieu of cash dividends.
• D) debtor pays $650 to "Nation on Line" for the past ten months of Internet service.

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Definitions:

Consolidated Equipment

The aggregate of equipment assets combined from parent and subsidiary entities for the purpose of financial reporting.

Par Value

The face value of a bond or stock as stated by the issuer, which is not indicative of its market value.

Fair Value

An estimate of the market value of an asset or liability, based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation.