Question
Most of Ashleys customers pay their accounts on a per-visit basis. Credit is extended to only a few regular customers and some food services businesses
Most of Ashleys customers pay their accounts on a per-visit basis. Credit is extended to only a few regular customers and some food services businesses that carry her bakery line. Bunch-A-Lunch is a lunch-truck sole proprietorship that carries Ashleys baked goods and is billed monthly. Its account has been in arrears for six months when Ashley receives a letter from a trustee in bankruptcy for Jason Bunch, the sole proprietor of Bunch-A-Lunch. The letter announces that Jason has made an assignment into bankruptcy and lists Ashleys restaurant among his creditors. A prove claim form is enclosed. Upon further investigation, Ashley discovers that the bank has a PPSA security interest registered in the lunch truck; that Steven, the part-time driver who fills in for Jason, has not been paid in two months; and that the business has only been in operation for two years. This is a surprise to Ashley because Jason said that the business was 10 years old on the customer account application form he filled out for Ashley a year ago. What should Brendan, Ashleys lawyer, tell her about the bankruptcy process, where her claim would rank among other creditors, and whether her debt could survive the bankruptcy?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started