QUESTION 1

1. Involuntary Chapter 11 cases can typically be categorized as a "free fall" case, a "prepack" case or a "pre-negotiated" case.
2. True
3. False

2 points

QUESTION 2

3. MadmelInc. files for Chapter 11 protection.Generally, who operates the business and develops a plan of reorganization in the Chapter 11 case?
5. The debtor in possession
6. The creditors' committee
7. The state courts
8. The trustee

2 points

QUESTION 3

1. In simplistic terms,Chapter 11 can be thought of in two phases.Phase 1 pertains to keeping the debtor alive.Phase2pertains to restructuring or reorganizing the debtor's business.
2. True
3. False

2 points

QUESTION 4

2. A contract under which the obligation of both the bankrupt and the other party to the contract are so far unperformed that the failure of either to complete performance would constitute a material breach excusing the performance of the other is an "executorycontract."
4. True
5. False

2 points

QUESTION 5

1. Chapter 11 is a flexible and cost effective way to restructure a business.
2. True
3. False

2 points

QUESTION 6

1. Which of the following are ways to provide adequate protection under the Bankruptcy Code?
2. indubitable equivalent
3. replacement liens
4. periodic cash payments
5. all of the above
6. none of the above

2 points

QUESTION 7

1. Like Chapter 7 and Chapter 13, a debtor in Chapter 11 has to attend a meeting of creditors.
2. True
3. False

2 points

QUESTION 8

3. Generally, filing Chapter 11 bankruptcy does not stop the collection activity of creditors.
5. True
6. False

2 points

QUESTION 9

1. Chapter 11has special provisions for a small business debtor and is subject to additional oversight by the U.S. Trustee.
2. True
3. False

2 points

QUESTION 10

1. The exclusivity period given to a debtor-in-possession is a powerful tool to help foster negotiations between the debtor-in-possession, creditors and equity security holders.
2. True
3. False

2 points

QUESTION 11

3. Grand Lighting Co. has filed a petition for voluntary bankruptcy under Chapter 11 of the Code. Which of the following will prohibit creditors from collecting debts that Grand Lighting incurred before the petition was filed while the case is pending?
5. An automatic stay
6. the creditors' committee
7. A proof of claim
8. A discharge statement
9. A voluntary petition

2 points

QUESTION 12

1. Which of the following is a false statment?
2. Chapter 11debtors typically obtain cash for financing Chapter 11 through the use of cash collateral or debtor-in-possession financingl
3. Most Chapter 11 cases have a trustee in place.
4. Generally, aChapter 11 debtor can continue to use its assets in the ordinary course of business without prior approval of the bankruptcy court.
5. A "free fall"Chapter 11is a voluntary petition that is filed without prior agreement with creditors.

2 points

QUESTION 13

3. Andy's business is not able to pay its debts, and the prospects for its finances to improve are slim. Andy decides not to continue the business.A reorganization is not viable and sale of the business is not possible. In this case, Andy should file a voluntary petition for which type of bankruptcy?
5. Chapter 12.
6. Chapter 7.
7. Chapter 13.
8. Chapter 11.

2 points

QUESTION 14

1. All of the following are benefits of Chapter 11, except for:
2. facilitate a sale of the company
3. hold collection efforts of creditors at a standstill
4. access to financing not otherwise available
5. provides mechanism to bind holdout (minority)creditors
6. limited reporting/disclosure requirements

2 points

QUESTION 15

1. Chapter 11 of the Bankruptcy Code addresses the adjustment of debts of a municipality, individuals and business entities.
2. True
3. False