In the Case of Bankruptcy and Liquidation of Assets, What

question 17

Multiple Choice

In the case of bankruptcy and liquidation of assets, what is the order of the claimants?

• A)Equity holders, debt holders, preferred shareholders
• B)Debt holders, preferred shareholders, equity holders
• C)Debt holders, equity holders, preferred shareholders
• D)Debt holders, equity holders and preferred shareholders equally.

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Definitions:

Onerous Exemption Clause

A term in a contract that imposes heavy obligations on one party, which may be difficult to fulfill.

Aggrieved Purchaser

A buyer who has suffered because of a breach of contract or misrepresentation during a purchase.

Fundamental Breach

A severe violation of a contract that justifies the aggrieved party's right to terminate the agreement and seek damages.

Condition

An essential term of a contract.