Background:

PI's business is profitable, but PI is concerned about debt management and the potential for future financial problems leading to bankruptcy. They want to know more about bankruptcy regulations and have asked BCA for information.

Pat and Gale ask you to prepare a report for PI about bankruptcy regulations and types of bankruptcy that could be available to PI if it accrues serious debt.

Instructions:

Research, analyze, and summarize the following in a report:

A. Chapter 7 bankruptcy:

1. describe the purpose and scope of Chapter 7 bankruptcy regulations

2. analyze and describe when a Chapter 7 bankruptcy is appropriate

B.Chapter 11 bankruptcy:

1. describe the purpose and scope of Chapter 11 bankruptcy regulations

2. analyze and describe when a Chapter 11 bankruptcy is appropriate

C. Chapter 11 Hypothetical Scenario:

1. create a hypothetical scenario in which PI is facing enormous debt and considering filing for bankruptcy

2. recommend Chapter 7 or Chapter 11 filing for PI in the hypothetical scenario and explain why.