"Preference Payments" Made by the Debtor to One Creditor to the Detriment

question 4

Multiple Choice

"Preference payments" made by the debtor to one creditor to the detriment of all other creditors within 90 days before the bankruptcy petition was filed:

• A) is reduced from the monies available to the general unsecured creditors.
• B) is usually written off.
• C) may be recovered and returned to the cash available for all creditors.
• D) are not recovered, as management assurances are binding.

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Definitions:

Intermediaries

Entities that act as middlemen in transactions, facilitating trade between buyers and sellers without owning the product.

Index Funds

Index funds are investment funds that replicate the portfolio of a specific index, aiming to achieve similar returns to the index they track.

Credit Risk

The potential for loss due to a borrower's failure to make payments on any type of debt.

Tax Treatment

The specific way tax laws apply to particular transactions or classes of income in a financial context.