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Patricia's Paddle Boats is to be liquidated. All creditors, both secured and unsecured, are owed $2,100,000. Administrative costs of liquidation and wage payments are expected
Patricia's Paddle Boats is to be liquidated. All creditors, both secured and unsecured, are owed $2,100,000. Administrative costs of liquidation and wage payments are expected to be $750,000. A sale of assets is expected to bring $2,500,000 after taxes. Secured creditors have a mortgage lien for $1,900,000 on the factory which will be liquidated for $1,200,000 out of the sale proceeds. The corporate tax rate is 40%.
How much and what percentage of their claim do the unsecured creditors receive, in total?
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