Question
Welders Supply is reorganizing and has presented a proposal based on a going-concern value of $2 million after reorganization costs and delinquent wages, benefits, and
Welders Supply is reorganizing and has presented a proposal based on a going-concern value of $2 million after reorganization costs and delinquent wages, benefits, and taxes. The proposed financial structure is $750,000 in new mortgage debt, $250,000 in subordinated debt and $1,000,000 in new equity. Secured creditors currently have a mortgage lien for $1.5 million on the factory and the unsecured creditors claims total $1.2 million. How much of the new debt and equity securities should the secured creditors receive?
$1.1 million
$1.0 million
$1.3 million
$1.5 million
$.75 million
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