1.

Although many business transactions involve debt secured by collateral, it's important to realize that in some cases creditors are faced with collecting debts that are unsecured as well. Knowing what rights creditors have against third parties who provide payment assurances on behalf of the debtor will allow aid in making claims against the debtor.

Read the case below and answer the questions that follow.

Yankee Export Company (YEC) is a purveyor of U.S. products for several European food market chains. YEC's annual revenue is approximately $10 million, and the company employs approximately 20 people, including YEC's only shareholders, directors, and officers: Moss and Whippany. Moss is the day-to-day manager of the venture, while Whippany is mostly an investor with no management duties other than giving consultation on business matters when asked by Moss. For several years, the venture was profitable, but due to a rapid increase in the value of the U.S. dollar against European currencies, YEC began to have cash flow problems. Its products were becoming more expensive for its European customers, and orders slowly dropped over a period of a year. When it appeared that YEC would be unable to generate enough cash to cover monthly expenses, Moss called for a meeting with Whippany and with YEC's accountants. The parties agreed that the rise of the dollar had a negative impact on all U.S. exports and that YEC was at the beginning of a financial challenge. The company's assets were approximately $200,000. Moss and Whippany decide to file for bankruptcy protection.

Once YEC filed its bankruptcy petition, the court appointed Jesse, a bankruptcy attorney, to take over YEC's assets and perform the bankruptcy plan. YECs assets form which of the following?

A. A debtor in possession

B. The cram-down

C. A voidable transfer

D. The automatic stay

E. The bankruptcy estate

2.

Required information Skip to question

Although many business transactions involve debt secured by collateral, it's important to realize that in some cases creditors are faced with collecting debts that are unsecured as well. Knowing what rights creditors have against third parties who provide payment assurances on behalf of the debtor will allow aid in making claims against the debtor.

Read the case below and answer the questions that follow.

Yankee Export Company (YEC) is a purveyor of U.S. products for several European food market chains. YEC's annual revenue is approximately $10 million, and the company employs approximately 20 people, including YEC's only shareholders, directors, and officers: Moss and Whippany. Moss is the day-to-day manager of the venture, while Whippany is mostly an investor with no management duties other than giving consultation on business matters when asked by Moss. For several years, the venture was profitable, but due to a rapid increase in the value of the U.S. dollar against European currencies, YEC began to have cash flow problems. Its products were becoming more expensive for its European customers, and orders slowly dropped over a period of a year. When it appeared that YEC would be unable to generate enough cash to cover monthly expenses, Moss called for a meeting with Whippany and with YEC's accountants. The parties agreed that the rise of the dollar had a negative impact on all U.S. exports and that YEC was at the beginning of a financial challenge. The company's assets were approximately $200,000. Moss and Whippany decide to file for bankruptcy protection.

Thirty days before filing for bankruptcy, YEC paid Holder Distributing Company (HDC) $25,000 for an invoice due. HDC is primarily owned by Whippany and he wanted the invoice paid prior to filing the bankruptcy petition. The payment to HDC is likely which of the following?

A. A bankruptcy estate

B. A legit Payment of Debt

C. An automatic stay

D. A reorganization plan

E. A voidable transfer

3.

Required information Skip to question

Although many business transactions involve debt secured by collateral, it's important to realize that in some cases creditors are faced with collecting debts that are unsecured as well. Knowing what rights creditors have against third parties who provide payment assurances on behalf of the debtor will allow aid in making claims against the debtor.

Read the case below and answer the questions that follow.

Yankee Export Company (YEC) is a purveyor of U.S. products for several European food market chains. YEC's annual revenue is approximately $10 million, and the company employs approximately 20 people, including YEC's only shareholders, directors, and officers: Moss and Whippany. Moss is the day-to-day manager of the venture, while Whippany is mostly an investor with no management duties other than giving consultation on business matters when asked by Moss. For several years, the venture was profitable, but due to a rapid increase in the value of the U.S. dollar against European currencies, YEC began to have cash flow problems. Its products were becoming more expensive for its European customers, and orders slowly dropped over a period of a year. When it appeared that YEC would be unable to generate enough cash to cover monthly expenses, Moss called for a meeting with Whippany and with YEC's accountants. The parties agreed that the rise of the dollar had a negative impact on all U.S. exports and that YEC was at the beginning of a financial challenge. The company's assets were approximately $200,000. Moss and Whippany decide to file for bankruptcy protection.

Suppose that YECs creditors believe that YEC is insolvent and will remain that way. Which of the following is correct?

A. The creditors have no recourse

B. The creditors can file a petition for a voidable transfer.

C. The creditors can file an automatic stay to prevent YEC from distributing any assets.

D. The creditors can file for a cram-down.

E. The creditors can file an involuntary bankruptcy petition.