Which of the Following Statements Is FALSE

question 42

Multiple Choice

Which of the following statements is FALSE?

• A)According to the provisions of the 1978 Bankruptcy Reform Act,U.S.firms can file for two forms of bankruptcy protection: Chapter 11 or Chapter 13.
• B)The Chapter 11 reorganization plan specifies the treatment of each creditor of the firm.In addition to cash payment,creditors may receive new debt or equity securities of the firm.The value of cash and securities is generally less than the amount each creditor is owed,but more than the creditors would receive if the firm were shut down immediately and liquidated.
• C)In the more common form of bankruptcy for large corporations,Chapter 11 reorganization,all pending collection attempts are automatically suspended,and the firm's existing management is given the opportunity to propose a reorganization plan.
• D)While developing a Chapter 11 reorganization plan,management continues to operate the business.

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Definitions:

Demand Payment

A request for the payment of a debt or obligation, often made formally and in writing.

Substantially Performed

A term used in contract law indicating that a party has completed the major obligations of a contract, even if minor details remain unfulfilled.

Benefits Promised

Guarantees or assurances given by an employer to employees, often relating to retirement, health care, or other support.

Case-by-Case Basis

A method of analysis or decision-making where each situation is considered individually, with attention to its unique aspects and details.