Gidgits Galore's payment plan under Chapter 11 was rejected by its committee of creditors, and the court
agreed and dismissed its petition. Gidgits Galore now seeks to file a petition in Chapter 7 to liquidate. The bank loaned Gidgits Galore $10,000 and secured the loan with a lien on 1,000 gidgits but did not file a financing statement. The bank is an unsecured creditor.
True
False
Choose the term that best matches the description given.
To sell the assets of a business, pay the bills and divide the remainder among stakeholders
1. Default
2. Liquidation
3. Collateral
4. Reorganization
Choose the term that best matches the description given.
Equipment, property or funds owned by a business
1. Assets
2. Collateral
3. Lien
4. Trustee
The answers to the questions have been given below
1. It is true that the bank is an unsecured creditor.
2. Liquidation is to sell the assets and share the proceeds among stakeholders.
3. Collateral is the Equipment, property or funds owned by a business.
This refers to the fact that the business is about to go on a shutdown. The assets that the business owns would then have to be shared among all the people that have stakes in it.
Collateral is the property that is used to get a loan. It refers to what the business would give in exchange for the funds that they are to loan.
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