Exam 25: Alternatives for Insolvent Borrowers

When a business employs the lights out option

The out of existence plan is also called the "lights-out option."

An alternative to a bankruptcy is a(n) __________ which is a form of a liquidation.

A nonstatutory option in which a venture simply ceases operations without paying creditors is called

When a turnaround advisor employs the retrenchment model, he may use all the following methods except

The workout method that replaces the top-level management with an interim team while a search for new top-level managers in conducted is called

A major disadvantage to a workout is that

Which of the following statements is correct about the ABC process for a corporation?

A workout model for insolvent businesses that involve a lot of short-short term actions intended to stabilize the company as quickly as possible is

All of the following statements about a workout are correct except

Westerfield Industries is insolvent. A turnaround advisor removes all of the executive officers and replaces them with her team of consultants to run the business until new executive officers can be hired. This is an example of which workout model?

In a workout, creditors are usually paid in all of the following ways except,

Turnaround advisor, Sam Smith, recommends hiring an interim team to replace existing top management while they search for new top management. This is called a retrenchment workout model.

Sandy incurred a massive debt in medical expenses owed to a local hospital. She simply did not have the assets or income to pay the bill. Therefore, she contacted the hospital and requested a reduction in the bill, a payment plan and the opportunity to work off part of the bill by working at the hospital cafeteria. The hospital agreed. This is an example of a(n)

The most common workout model for businesses that are insolvent is

When a business no longer has enough money to pay its bills and maintain operations, it is considered to be insolvent.

Another name for a creditor in an ABC is a(n)

An attempt by a debtor to solve a financial problem through a consensual agreement with creditors outside of a court proceeding is a(n)

During an ABC, it is determined that the funds from the sale of assets is not sufficient to pay all of the liens in full. What will be done in this situation?

As a result of an ABC, a bar date of was set on January 1^st. Bob, a creditor filed a claim on January 15^th. What most likely will be the outcome of the of Bob's claim?