Successful Private Workouts Are Better for Firms Than Formal Bankruptcy

question 32

Multiple Choice

Successful private workouts are better for firms than formal bankruptcy because:

• A) direct costs are considerably lower in private workouts.
• B) private workout firms can issue new debt senior to all prior debt.
• C) stock price increases are greater for private workouts than for firms emerging from formal bankruptcy.
• D) Both direct costs are considerably lower in private workouts; and private workout firms can issue new debt senior to all prior debt.
• E) Both direct costs are considerably lower in private workouts; and stock price increases are greater for private workouts than for firms emerging from formal bankruptcy.

---

Definitions:

Search and Seize

Legal procedures used by law enforcement where they search a person or property and confiscate any relevant evidence to a crime.

Executive Agency

A government department or unit under the direct control of the executive branch, responsible for implementing government policy and administration.

Subpoena Duces Tecum

A court order requiring a person to produce documents or records for a legal proceeding.

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections for individuals, including the right against self-incrimination and the right to due process of law.