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 $10,000 and accounts receivable of $29,000. In addition, the company owns four plots of land. The first two (labeled A and B) cost $12,000 each. Plots C and D cost the company $24,000 and $29,000, respectively. A mortgage lien is attached to each parcel of land as security for four different notes payable of $19,000 each. Presently, the land can be sold for the following: |
Plot A | $ | 20,000 |
Plot B | $ | 15,000 |
Plot C | $ | 18,000 |
Plot D | $ | 35,000 |
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Another $23,000 note payable is unsecured. Accounts payable at this time total $40,000. Of this amount, $11,000 is salary owed to the company's workers. No employee is due more than $3,800. |
The company expects to collect $16,000 from the accounts receivable if liquidation becomes necessary. Administrative expenses required for liquidation are anticipated to be $27,440. |
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