81. What is the name for the process whereby a debtor voluntarily enters bankruptcy?

a. insolvency b. a conveyance

c. a facilitation d. an assignment

82. What is the legal name given to contractual arrangements between a debtor and its creditors for payment of debts that will allow a financially distressed business to continue operating?

a. declaration b. debtor in possession financing

c. assignment in bankruptcy d. proposal

83, What is the result if a Division I proposal is rejected?

1. deemed bankruptcy of the debtor
2. debtor may make an additional proposal
3. a meeting of the creditors
4. debtor is required to seek an arrangement

84. What is meant by a debtor's assignment in bankruptcy?

1. the creditor's choice between legal action and extending the time to pay
2. the trustee will try to assess the debtor's financial health
3. the voluntary assignment of all the debtor's property for the creditors' benefit
4. the debtor can carry on business or cease business

85. Which of the following would most likely influence the creditor's decision with regard to its options relating to the deteriorating financial health of a business debtor?

1. whether a greater recovery of debt is possible through a proposal or through legal remedies
2. the creditor's ability to accelerate repayment of the debt to payment on demand
3. the ability of a secured creditor to take private action against specific assets
4. the ability to enter into negotiations with other creditors to gain greater debt recovery

86. What is the nature of a relationship in which a business sells inventory to a customer to which it is not related or connected in anyway?

a. intercommercial b. arm's length

c. commercially reasonable d. consumer transaction

87. Treats 'n More Bakery Inc. expects that bankruptcy proceedings will be commenced against it within the next month, and the owner has just transferred the title of its commercial ovens to her sister. How will this transaction be viewed by the bakery's creditors?

1. as a non arm's length transaction that may be unwound by the courts
2. as proof of the bakery's inability to operate as a going concern
3. as an unfortunate event, because now these assets are no longer available to the creditors
4. as an arm's length transaction that may be unwound by the courts

88. What official is appointed by creditors to act on their behalf and supervise the actions of the trustee in bankruptcy?

a. an insolvency trustee b. a receiver

c. an inspector d. a trustee in bankruptcy

89. How does a creditor provide formal notice to the trustee of the amount owed and the nature of the debt?

a. through a financing statement b. through a creditor's meeting

c. through a proof of claim d. through a statement of claim

9o. Which of the following is a distinguishing characteristic of a preferred creditor, with respect to distributing the proceeds of a bankrupt's estate to creditors?

1. Each is paid a reasonable amount for supplies according to their order of priority.
2. Preferred creditors typically have a security interest in a particular asset.
3. Each is paid a reasonable amount for services according to their order of priority.
4. Preferred creditors are guaranteed a minimum $3000 recovery.