Exam 25: Alternatives for Insolvent Borrowers

Renaldo is a turnaround advisor to Futbol Fanatics Incorporated, an insolvent business. To assist them in their workout plan, Renaldo advises to reduce the size of the business and to focus on only one aspect of the business rather than a wide variety of areas. He suggests selling several storage buildings and firing several of the employees. His workout model would be called

Each of the following is part of the process to define the problem for a turnaround advisor except

Dunlin Muffin is a paper company that has gone insolvent due to the decrease in print material in lieu of digital material. However, top management refuses to look to any changes in the business plan. Which workout model would a turnaround advisor most likely suggest if he feels the current management is resistant to any changes in strategy to keep the business alive?

In Penske Truck Leasing Co. v. Cool Trans NJ, the recognized all the following roles of the assignee except

Often times, a condition of a workout process is that the creditor may require the debtor to hire a turnaround professional who will help with the workout process.

In an assignment for the benefit of creditors there is a fiduciary duty to work in the best interests of the

An ABC allows the parties to liquidate assets as an alternative to bankruptcy by allowing a debtor to voluntarily assign property in trust for her creditors.

A workout method that generates revenue with new innovations and modifying the company's image or mission is

Antwiser Butch Beer's organizational structure of top management involved all of the heirs of the original founders of company 100 years ago. Only two of the eight top managerial heirs actually work for the company, while the other six only draw a large substantial salary. Additionally, the company is currently plagued with a money losing division that sells yeast. Bev Inn, a turnaround advisor, suggests that the six unproductive heirs be fired and the two remaining heirs continue on as managers and the company stops yeast production. This is an example of which type of workout models?

The acronym, SWOT, for the five step plan of a turnaround advisor means

Which workout model involves significant restructuring of the organizational structure and removing inefficient practices?

Dewy, Cheatum and Howe Law Firm has a billboard that states, "Hire us so we can make as much money as possible for us!" is insolvent. The hire a turnaround advisor who suggests they change the name of their firm and change the billboard advertisement to read, "We are here to serve your needs as you are our first priority!" Of which workout model is this an example?

In an ABC the first step in this process is to obtain a judgment for the court.

A workout is only an option for a business if a bankruptcy is not possible.

Marty Hog Hunting Supplies has become insolvent due to low sales and nonexistent profits. They hire a turnaround advisor, Rachel Evans, who suggests that they modify their advertising model which currently includes rainbows, hearts and unicorns and a mission statement that states, "Hunting Hogs is Magical." Rachel suggests they should change to a camo theme and a mission, "Hog Hunting for the Mighty." She also suggests that company image should switch away from the current cartoon image to the outdoors theme. Rachel's workout model is

Once a fair workout model is achieved, all creditors must agree to it as binding.

A turnaround advisor may do all the following tasks except

Explain the role of a turnaround advisor and what types of assistance he may provide in the workout process.

Al's Automotive is in the process of going through an ABC. After distributing all the fund to any creditor that has a lien on the asset, $20,000 still remains. What will happen to that amount of money next?

Monkey Business Corp. has been in business for over 100 years and to date, the leaders have been made up of all the relatives of the original founder, C.M. Panzee. In fact, before a new member joins the leadership they sign a symbolic oath that specifically states, "our business practices have not changed in over 100 years… and we are proud of that." Unfortunately, Monkey Business have been insolvent for over a year and the leaders have not indicated that they plan on making any changes as they believe it would dishonor the legacy of C.M. Panzee. Due to the insolvency, a TA is hired. Given the facts stated above, which type of workout model would be the best model to follow?