2. Two-and-a-half years after filing the petition for bankruptcy, Hal’s management, its creditors, the equity holders, and other parties in interest agree on a reorganization value of $500,000. Which of the following statements is most likely?

a The reorganization value approximates the appraised value of the firm as a going concern less the prepetition liabilities.

b The reorganization value approximates the fair value of the assets less the fair value of the prepetition and postpetition liabilities.

c The reorganization value approximates the fair value of the assets less the book value of the postpetition liabilities and the estimated settlement value of the prepetition liabilities.

d The reorganization value approximates the fair value of the entity without considering the liabilities.

620 CHAPTER 18