Bank a Has Debt That Is Backed with Secured Assets

question 51

Multiple Choice

Bank A has debt that is backed with secured assets of Company B,who is currently liquidating its assets in bankruptcy.If Bank A is owed $10,000,000 and the liquidation of the assets will provide $8,000,000,then what happens to the remaining $2,000,000?

• A) the $2,000,000 will be lost in the bankruptcy process
• B) the $2,000,000 will have to be repaid through the automatic securitization of other assets
• C) the $2,000,000 will become an unsecured or general credit amount in the liquidation process.
• D) none of the above.

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