Question
Oregon Corporation has filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Reform Act. Its creditors are considering an attempt to force
Oregon Corporation has filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Reform Act. Its creditors are considering an attempt to force liquidation. The company currently holds cash of $25,000 and accounts receivable of $44,000. In addition, the company owns four plots of land. The first two (labeled A and B) cost $27,000 each. Plots C and D cost the company $39,000 and $44,000, respectively. A mortgage lien is attached to each parcel of land as security for four different notes payable of $34,000 each. Presently, the land can be sold for the following:
Plot A | $35,000.00 |
Plot B | $30,000.00 |
Plot C | $33,000.00 |
Plot D | $65,000.00 |
Another $37,000 note payable is unsecured. Accounts payable at this time total $70,000. Of this amount, $20,000 is salary owed to the company's workers. No employee is due more than $5,300. | ||||||||
The company expects to collect $31,000 from the accounts receivable if liquidation becomes necessary. Administrative expenses required for liquidation are anticipated to be $60,640.
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