AFM231 Lecture Notes - Lecture 22: Unsecured Creditor, Secured Creditor, Student Loan
22 Aug 2017
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Risk for equity holders and creditors when companies fail. Business structured around what if business fails. Disciplined distribution of assets to creditors: according to their entitlement while not being harsh to debtors. Sending debtors to jail does not resolve issue. Origins and purpose of bankruptcy legislation box p 688. If many assets and too many creditors, most creditors what away. Why: chance of recovering anything significant is limited, no point spending time to recover the asset. Federal law: two acts, bankruptcy and insolvency act governs, governs most bankruptcies and insolvencies + proposals, proposals. : allows debtor to restructure its debt in order to avoid bankruptcy: companies creditors act (ccaa) governs. Large insolvencies: arrangements: where the goal is to re-organize affaires to allow the corporation to continue in operation, example, comparison, chapter 11 arrangements in the us. It is the sum of a (cid:271)a(cid:374)k(cid:396)upt"s assets legal rights, interests and entitlements to property of any kind.
