Which of the following is the best example of a Type I subsequent event?

a. The company defaults on its line-of-credit with the bank subsequent to year end but previous to the release of the audit opinion.

b. The company initiates an initial public offering subsequent to year-end.

c. A related-party transaction occurs during the course of the audit.

d. Litigation that was accrued as a liability in the year under audit is settled subsequent to year-end for an amount in excess of estimates.