Within the Context of Bankruptcy and Insolvency Laws, Which of the Following

Multiple Choice

Within the context of bankruptcy and insolvency laws, which of the following statements is TRUE?

A) A preferred creditor is entitled to be paid before all other creditors.
B) Pro rata sharing is a system in which each class of creditors is paid the same amount, regardless of how many members it contains.
C) A preference occurs when the debtor pays one creditor, but not others, within a certain time prior to bankruptcy.
D) A share exchange is possible only under an assignment into bankruptcy.
E) Liquidation occurs only after the debtor is discharged from bankruptcy.