Which One of the Following Statements Is Correct Concerning a Chapter

question 32

Multiple Choice

Which one of the following statements is correct concerning a Chapter 7 bankruptcy?

• A)A firm in Chapter 7 bankruptcy is reorganizing its operations such that is can return to being a viable concern.
• B)Under a Chapter 7 bankruptcy, a trustee will assume control of the firm's assets until those assets can be liquidated.
• C)Chapter 7 bankruptcies are always involuntary on the part of the firm.
• D)Under a Chapter 7 bankruptcy, the claims of creditors are paid prior to the administrative costs of the bankruptcy.
• E)Chapter 7 bankruptcy allows a firm to restructure its equity position such that new shares of stock are generally issued prior to the firm coming out of bankruptcy.

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