Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 Upon review of his accounts, Caine wishes to convert the involuntary petition for his business from a Chapter 11 into a Chapter 7. Ne the courts likely to allow the corwersion? X Yes, if it is in the best interest of the creditors. Yes, if it is in the best interest of the debtor Caine is a small business owner of a single member LLC (Caine's Clocks, LLC. Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25,000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers, who owes him $7,000, is filing for Chapter 7 bankruptcy. The business accounts are as follows: Creditor 1: National Bank The bank gave Caine's Clocks a small business loan for $100,000 at 8% interest. National Bank currently has $75,000 remaining in principal. When the bank gave the business the loan, it also secured an interest in the business irwentory as collateral for the loan. Creditor 2: Franklin Land Management This is the landlord of Caine's commercial business space Caine has five months remaining on his lease for which he owes a total of $15,000 Creditor 3: Capital Card o Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000. Caine, individually, is also a personal guarantor for this account Cerita Sant Shinnine C No, because he is not a debtor in possession No, because the case was commenced as an involuntary Chapter 11 Assume that Caine has filed a plan for reorganization for the debts of the business. The shipping company, however, does not like the terms of the plan because the out for the debt will be over for the Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 Assume that Caine has filed a plan for reorganization for the debts of the business. The shipping company, however, does not like the terms of the plan because the payout for the debt will be over five years. Does the shipping company have any standing to reject its terms? Yes, but they may forfeit their priority right if the court stil confirms the plan Caine is a small business owner of a single member LLC (Caine's Clocks, LLC). Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25,000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers who owes him $7,000, ispiling for Chapter 7 bankruptcy. The business accounts are as follows Creditor 1: National Bank The bank gave Caine's Clocks a small business loan for $100,000 at interest. National Bank currently has 375.000 remaining in principal. When the bank gave the business the loan it also secured an interest in the business inventory as collateral for the loan Creditor : Franklin Land Management This is the landlord of Caine's commercial buuiness pace. Caine has five months remaining on his lease for which he owes a total of $15,000 Creditor 3: Capital Card Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000. Caine individually, is also a personal guarantor for this account Peritor 4 Seanor Chinninen No, unless Capital Card and the Landlord also disaprees with the plan Yes, they may reject the plan, No, unless all the creditors disagree with the plan Are the ring that Caine inherited and the tax refund part of the bankruptcy Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 Are the ring that Caine inherited and the tax refund part of the bankruptcy estate? No, the ring is exempt property, but the refund is not No, both the ring and the refund are exempt property Caine is a small business owner of a single member LLC (Caine's Clocks, LLC. Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25.000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers, who owes him $7,000, is filing for Chapter 7 bankruptcy. The business accounts are as follows: Creditor 1: National Bank The bank gave Caine's Clocks a small business loan for $100,000 at 8% interest. National Bank currently has $75,000 remaining in principal, When the bank gave the business the loan, it also secured an interest in the business inventory as collateral for the loan Creditor 2: Franklin Land Management This is the landlord of Caine's commercial business space Caine has five months remaining on his lease for which he owes a total of $15,000, Creditor 3: Capital Card Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000. Caine, individually, is also a personal guarantor for this account Creditreannt Shinninen X Yes, the ring is non-exempt property, but the refund is not Yes, both are non-exempt property When Caine's attorney filed Caine's petition for Chapter 7, the attorney failed to include a notice to the creditor holding Caine's medical debt. Caine was unaware of the mission because he did not get the opportunity to review the filing before the attorney submitted it with the court. Alter the judicial discharge of his debts, Caine receives a notice from the creditor Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 When Caine's attorney filed Caine's petition for Chapter 7, the attorney failed to include a notice to the creditor holding Caine's medical debt. Caine was unaware of the omission because he did not get the opportunity to review the filing before the attorney submitted it with the court. After the judicial discharge of his debts, Caine receives a notice from the creditor demanding payment is Caine obligated to still pay this bill? a No, because Calne may retroactively provide notice Caine is a small business owner of a single member LLC (Caine's Clocks, LLC). Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25,000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers, who owes him $7,000, is filing for Chapter 7 bankruptcy. The business accounts are as follows: Creditor 1: National Bank The bank gave Chine's Clocks a small business loan for $100,000 at 8% interest. National Bank currently has $75,000 remaining in principal. When the bank gave the business the loan, it also secured an interest in the business inventory as collateral for the loan Creditor 2: Franklin Land Management This is the landlord of Caine's commercial business space Caine has five months remaining on his lease for which he owes a total of $15,000. Creditor 3: Capital Card . Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000 Caine, Individually, is also a personal guarantor for this account Credit Suannrt Shinninen No, because the omission was a mistake Yes, but only if the creditor first obtains court approval Yes, because the failure to provide proper notice to the creditor means the debt was not discharged Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 Upon review of his accounts, Caine wishes to convert the involuntary petition for his business from a Chapter 11 into a Chapter 7. Ne the courts likely to allow the corwersion? X Yes, if it is in the best interest of the creditors. Yes, if it is in the best interest of the debtor Caine is a small business owner of a single member LLC (Caine's Clocks, LLC. Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25,000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers, who owes him $7,000, is filing for Chapter 7 bankruptcy. The business accounts are as follows: Creditor 1: National Bank The bank gave Caine's Clocks a small business loan for $100,000 at 8% interest. National Bank currently has $75,000 remaining in principal. When the bank gave the business the loan, it also secured an interest in the business irwentory as collateral for the loan. Creditor 2: Franklin Land Management This is the landlord of Caine's commercial business space Caine has five months remaining on his lease for which he owes a total of $15,000 Creditor 3: Capital Card o Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000. Caine, individually, is also a personal guarantor for this account Cerita Sant Shinnine C No, because he is not a debtor in possession No, because the case was commenced as an involuntary Chapter 11 Assume that Caine has filed a plan for reorganization for the debts of the business. The shipping company, however, does not like the terms of the plan because the out for the debt will be over for the Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 Assume that Caine has filed a plan for reorganization for the debts of the business. The shipping company, however, does not like the terms of the plan because the payout for the debt will be over five years. Does the shipping company have any standing to reject its terms? Yes, but they may forfeit their priority right if the court stil confirms the plan Caine is a small business owner of a single member LLC (Caine's Clocks, LLC). Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25,000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers who owes him $7,000, ispiling for Chapter 7 bankruptcy. The business accounts are as follows Creditor 1: National Bank The bank gave Caine's Clocks a small business loan for $100,000 at interest. National Bank currently has 375.000 remaining in principal. When the bank gave the business the loan it also secured an interest in the business inventory as collateral for the loan Creditor : Franklin Land Management This is the landlord of Caine's commercial buuiness pace. Caine has five months remaining on his lease for which he owes a total of $15,000 Creditor 3: Capital Card Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000. Caine individually, is also a personal guarantor for this account Peritor 4 Seanor Chinninen No, unless Capital Card and the Landlord also disaprees with the plan Yes, they may reject the plan, No, unless all the creditors disagree with the plan Are the ring that Caine inherited and the tax refund part of the bankruptcy Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 Are the ring that Caine inherited and the tax refund part of the bankruptcy estate? No, the ring is exempt property, but the refund is not No, both the ring and the refund are exempt property Caine is a small business owner of a single member LLC (Caine's Clocks, LLC. Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25.000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers, who owes him $7,000, is filing for Chapter 7 bankruptcy. The business accounts are as follows: Creditor 1: National Bank The bank gave Caine's Clocks a small business loan for $100,000 at 8% interest. National Bank currently has $75,000 remaining in principal, When the bank gave the business the loan, it also secured an interest in the business inventory as collateral for the loan Creditor 2: Franklin Land Management This is the landlord of Caine's commercial business space Caine has five months remaining on his lease for which he owes a total of $15,000, Creditor 3: Capital Card Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000. Caine, individually, is also a personal guarantor for this account Creditreannt Shinninen X Yes, the ring is non-exempt property, but the refund is not Yes, both are non-exempt property When Caine's attorney filed Caine's petition for Chapter 7, the attorney failed to include a notice to the creditor holding Caine's medical debt. Caine was unaware of the mission because he did not get the opportunity to review the filing before the attorney submitted it with the court. Alter the judicial discharge of his debts, Caine receives a notice from the creditor Business Case: Bankruptcy Apply It: Bankruptcy Total points: 1/5 Attempts left: 1 When Caine's attorney filed Caine's petition for Chapter 7, the attorney failed to include a notice to the creditor holding Caine's medical debt. Caine was unaware of the omission because he did not get the opportunity to review the filing before the attorney submitted it with the court. After the judicial discharge of his debts, Caine receives a notice from the creditor demanding payment is Caine obligated to still pay this bill? a No, because Calne may retroactively provide notice Caine is a small business owner of a single member LLC (Caine's Clocks, LLC). Caine's company has had a decline in sales and Caine is struggling to pay his creditors. The business has four creditors with nearly $250,000 in outstanding debt. The company also has inventory totaling approximately $25,000 and an outstanding accounts receivable of $13,000. Caine has recently received a notice that one of his bigger customers, who owes him $7,000, is filing for Chapter 7 bankruptcy. The business accounts are as follows: Creditor 1: National Bank The bank gave Chine's Clocks a small business loan for $100,000 at 8% interest. National Bank currently has $75,000 remaining in principal. When the bank gave the business the loan, it also secured an interest in the business inventory as collateral for the loan Creditor 2: Franklin Land Management This is the landlord of Caine's commercial business space Caine has five months remaining on his lease for which he owes a total of $15,000. Creditor 3: Capital Card . Caine's Clocks obtained a business credit card which holds an outstanding balance of $60,000 Caine, Individually, is also a personal guarantor for this account Credit Suannrt Shinninen No, because the omission was a mistake Yes, but only if the creditor first obtains court approval Yes, because the failure to provide proper notice to the creditor means the debt was not discharged
