If Absolute Priority Rules Are Enforced in a Chapter 7

question 61

Multiple Choice

If absolute priority rules are enforced in a Chapter 7 bankruptcy,which of the following is least likely to receive payment?

• A) local,state,or federal governments owed taxes
• B) owners of common stock
• C) owners of bonds
• D) banks holding loans secured by collateral

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Definitions:

Professional Licensing Statutes

Laws and regulations that establish the requirements and standards for obtaining and maintaining a license to practice certain professions.

Public's Health

The science and practice of protecting and improving the health of a community, as by preventive medicine, health education, control of communicable diseases, application of sanitary measures, and monitoring of environmental hazards.

Age of Majority

The legally recognized age at which an individual is considered an adult and capable of assuming legal rights and responsibilities.

Unconscionable

An action or a contract deemed to be so unfair or unjust towards a party that no reasonable or informed person would agree to it.