2. Max is a building contractor who isn't always the best at paying his bills on time (or at all for that matter). He purchased materials on his credit cards to complete some jobs for which he never got paid. Additionally, Max had two employees, Billy Ray and Jim Bob, to whom he was way behind in paying. In fact, Max owed Billy Ray and Jim Bob $17,850 each for work they did on a project in April, May and June. On July 1, Max was petitioned by Bank One into bankruptcy under Chapter 7. Bank One and AmeriBank are unsecured creditors of Max, owed $5,000 and $10,000 respectively. Max also owed Caterpillar $45,000, secured by a valid perfected security interest on Max's machinery, valued at $20,000. Max has no other debts, except his prior year's income tax liability of $6,000. Shortly after the filing, Hunt was appointed Trustee over Max's bankruptcy estate. Hunt gathered and sold Max's non-exempt property (including Max's machinery for $20,000, to which Max consented) and now the sole asset of the estate is $80,700 cash Hunt has administrative expenses of $4,000 and is ready to distribute the $80,700 to satisfy the following claims: Income tax liability Caterpillar's claim Bank One's claim Administration expenses Billy Ray Jim Bob AmeriBank's claim $6,000 $45,000 $5,000 $4.000 $17,850 $17,850 $10,000 a) Please describe what type of claim each creditor has (secured, unsecured, priority, etc.) and the amount that each creditor will receive upon distribution Be careful to explain how a bankruptcy court would determine the amount of each distribution, (Hint: Chapter on Bankruptcy). 10 points. Income Tax Liability a. 260 words