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Essay / Research Paper Abstract
This 3-page paper explains two questions about bankruptcy, one dealing with an involuntary bankrtupcy petition and the other with a Chapter 11 filing. Bibliography lists 2 sources.
Page Count:
3 pages (~225 words per page)
File: D0_MTbankexam.rtf
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Unformatted sample text from the term paper:
$200,000 from Hamilton Bank to purchase the building and begin renovation. However, when renovation costs exceeded their estimates, troubles loomed, and the partnership was unable to obtain additional financing. Though
Beren filed an involuntary petition to put the partnership into Chapter 7, the other partners objected. Should the petition for involuntary bankruptcy be granted?
Whats interesting about this particular case is that involuntary bankruptcy is typically initiated by creditors, rather than partners. Creditors will force a company into involuntary bankruptcy for a
variety of reasons. For one thing, it forces the debtor to face all creditors at once and prevents the debtor from draining his or her assets before moving on to
Chapter 13 (in which creditors will only get pennies on the dollar) (Avery, 2008). A debtor becomes the target of an involuntary bankruptcy if the debtor isnt paying up, aside
from disputed arrears, or isnt making regular payments (Avery, 2008). An involuntary petition needs at least three creditors owed a minimum total of $10,775 (Avery, 2008). If there are fewer
than 12 creditors only one creditor owed at least $10,775 is needed (Avery, 2008). If a trial finds that a debtor is "fair game" for an involuntary bankruptcy petition, the
bankruptcy court enters an order for relief (Avery, 2008). But if the court finds the petition was filed I bad faith, it can award monetary damages and attorneys fees to
the debtor, meaning the creditor is out more money (Avery, 2008). The issue with this case is that it isnt the
creditor filing against the partnership, but one of the partners. The creditors, at this point, havent complained (which is interesting, considering the partnership quit making payments on its loan). The
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