Management and Organizational Studies 2275A/B Chapter Notes - Chapter 27: Secured Creditor, Chapter 27, Income Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

Protect creditors doesn"t affect rights of perfected secured creditors. Trustee in bankruptcy for distribution to the debtor"s unsecured creditors. Bankruptcy: a legal process by which assets of an insolvent debtor are transferred to a. Trustee in bankruptcy: person in legal responsibility under bia for administering bankruptcies and proposals. Trustee will assess the estate (assets of a bankrupt individual or corporate) and prepare preliminary statement of assets and liabilities. You must be insolvent to go bankrupt, but not all insolvent people become bankrupt. Debts are more than liability (balance sheet test) Unable to pay debts as they come due (income statement test) Ceased paying obligations as they become due. )nsolvency is a factual matter relating to a person"s assets and liabilities or his ability to debtor"s assets. All assets are taken by secured creditor out of business, but not bankrupt pay his debts; bankruptcy is a legal mechanism.