Creditors' Administration in Canada can end with reorganisation (the company continues to operate) or in bankruptcy (it is insolvent and not all creditors receive what they are due. Take the following information: Book Value Liquidation Value Cash 500,000 500,000 Accounts Receivable 1,700,000 1,400,000 Inventory 3,400,000 2,200,000 Land 4,700,000 3,500,000 Building 8,000,000 5,600,000 Equipment 7,000,000 3,000,000 Current liabilities Accounts payables 2,000,000 Notes payable 1,000,000 Taxes payable 700,000 Salaries payable 400,000 Long term liabilities Mortgage on land 3,500,000 1st mortgage on building 4,000,000 2nd mortgage on building 1,600,000 Subordinated debentures 4,500,000 only subordinated to the two mortgages Shareholder equity Preferred shares 4,500,000 Common shares 6,500,000 Retained earnings (3,400,000) The trustee administering this bankruptcy is paid 12% of the funds available to distribute to all creditors The order of distribution under creditors' administration law is: Secured creditors (secured loans, mortgages, notes) Bankruptcy trustee fees Salaries and wages owed for work done Taxes collected or incurred before the close down into bankruptcy Unsecured creditors of all types Bondholders Preferred share holders Common share holders Each class must be fully paid out (100 cents on the dollar) before moving to the next class Once a class cannot be paid in full, all members of that class get an equal percentage of what's left All following classes get zero. How far down the order of payment can pay outs be made, and what percentage of the remaining funds goes to the last class?