MCS 3040 Chapter Notes - Chapter 27: Security Interest, Fiduciary, Secured Creditor
8 Dec 2012
School
Department
Course
Professor
Document Summary
When a business or economy experiences downturn, even healthy businesses run into difficulties. To ensure both the business in hard times and its creditors are treated fairly, s body of law, generically called insolvency law, has evolved. Law provides several options for debtors & creditors as well as a framework for the ultimate financial failure - bankruptcy. If a business isn"t able to cope with a specific debt or its obligations in general, there are several possibilities to be explored ranging from informal negotiations to bankruptcy. Before considering bankruptcy, many business may 1st try to solve their financial distress by way of negotiated settlement. Could try to convince creditors that business can be saved. A settlement can be formal/informal depending on the circumstances. Creditors may meet with debtors sometimes with a facilitator to try to reach an agreement that is acceptable to both parties, and allows business to keep operating/terminate without expensive legal proceedings.
