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Acme Rocket Company has the following assets. The Company has a mortgage on their building which they just purchased with a 20% down payment. The
Acme Rocket Company has the following assets. The Company has a mortgage on their building which they just purchased with a 20% down payment. The mortgage is only secured by the building and no other assets. The Company also has a senior term loan for $1,500 with Wiley Chayote Bank which has a blanket first lien on all company assets except the building which the bank has a 2nd lien security interest on. The Company never makes a payment on their mortgage and declares bankruptcy. Calculate the percentage recovery to the nearest whole percentage for the term debt assuming a 100% collateral value for the cash, 80% for the A/R,75% for the building and 50% for the other PP\&E assets: Cash: $100 A/R:$1,000 Building: $2,000 Other PP\&E: $500 100% 94% 77% 69%
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