Question 5 2 pts ABC Inc. files for chapter 7 bankruptcy. It has many creditors. It owes $5 million to Citi Bank (it used its inventory as collateral), owes $3 million to Chase Bank (used its building as collateral), owes $1 million to Huntington Bank (used its receivables as collateral), owes employees $100,000 in back wages, owes $20,000 in unpaid accounting fees, owes $30,000 in unpaid utilities, owes $50,000 in back Federal income taxes for last year, owes $800,000 to other unsecured creditors. Its inventory is sold, netting $500,000, its building is sold, netting $3 million, it has receivables of $500,000, and $1 million in other assets. Which of the following is true? The employees and utilities will receive the same percentage of their claims. The employees and accounting firm will receive the same percentage of their claims. The employees and IRS will receive the same percentage of their claims. The accounting firm and utilities will receive the same percentage of their claims. The IRS and utilities will receive the same percentage of their claims. The three banks will each receive the same percentage of their claims. ABC Inc. files for chapter 7 bankruptcy. It has many creditors. It owes $5 million to Citi Bank (it used its inventory as collateral), owes $3 million to Chase Bank (used its building as collateral), owes $1 million to Huntington Bank (used its receivables as collateral), owes employees $100,000 in back wages, owes $20,000 in unpaid accounting fees, owes $30,000 in unpaid utilities, owes $50,000 in back taxes for last year, owes $800,000 to other unsecured creditors. Its inventory is sold, netting $500,000, its building is sold, netting $3 million, it has receivables of $500,000, and $1 million in other assets. Which of the following is true? Huntington Bank will get the $500,000 from the receivables and be an unsecured credit for the additional $500,000 it is owed. The employees will get the same percentage of their claims as the utilities get of their claims. All unsecured creditors will get the same percentage of their claims. Any amounts not received by the unsecured creditors will be discharged. None of the answers are true. Question 5 2 pts ABC Inc. files for chapter 7 bankruptcy. It has many creditors. It owes $5 million to Citi Bank (it used its inventory as collateral), owes $3 million to Chase Bank (used its building as collateral), owes $1 million to Huntington Bank (used its receivables as collateral), owes employees $100,000 in back wages, owes $20,000 in unpaid accounting fees, owes $30,000 in unpaid utilities, owes $50,000 in back Federal income taxes for last year, owes $800,000 to other unsecured creditors. Its inventory is sold, netting $500,000, its building is sold, netting $3 million, it has receivables of $500,000, and $1 million in other assets. Which of the following is true? The employees and utilities will receive the same percentage of their claims. The employees and accounting firm will receive the same percentage of their claims. The employees and IRS will receive the same percentage of their claims. The accounting firm and utilities will receive the same percentage of their claims. The IRS and utilities will receive the same percentage of their claims. The three banks will each receive the same percentage of their claims. ABC Inc. files for chapter 7 bankruptcy. It has many creditors. It owes $5 million to Citi Bank (it used its inventory as collateral), owes $3 million to Chase Bank (used its building as collateral), owes $1 million to Huntington Bank (used its receivables as collateral), owes employees $100,000 in back wages, owes $20,000 in unpaid accounting fees, owes $30,000 in unpaid utilities, owes $50,000 in back taxes for last year, owes $800,000 to other unsecured creditors. Its inventory is sold, netting $500,000, its building is sold, netting $3 million, it has receivables of $500,000, and $1 million in other assets. Which of the following is true? Huntington Bank will get the $500,000 from the receivables and be an unsecured credit for the additional $500,000 it is owed. The employees will get the same percentage of their claims as the utilities get of their claims. All unsecured creditors will get the same percentage of their claims. Any amounts not received by the unsecured creditors will be discharged. None of the answers are true
