Keck Business Forms recently failed and will be liquidated by a court-appointed trustee who will charge $300,000 for her services. The preliquidation balance sheet follows. Assume that the trustee liquidates the assets for $4.8 million, with $2.6 million coming from the sale of current assets and $2.2 million coming from fixed assets. Also assume that the unsecured bonds are subordinate to the notes payable. Prepare a table indicating the amount to be distributed to each claimant. Do the firm’s owners receive any funds?
aRepresents wages of $4,000 or less per employee earned within 90 days of filing bankruptcy for 200 of the firm’s employees. bUnpaid employee benefits that were due in the 180-day period preceding the firm’s bankruptcy filing, which occurred simultaneously with the termination of its business.
cUnsecured customer deposits not exceeding $1,800 each.
dFirst and second mortgages on the firm’s total fixed assets.

  • CreatedMarch 26, 2015
  • Files Included
Post your question