In a Chapter 7 liquidation, the situation for a firm after the required payments of the bankruptcy fees, the receipts on the collateral for the secured bond payments, and wages and taxes, and any other higher priority liabilities, is as follows.

Remaining proceeds ($)

Net after bankruptcy fees, secured

bond payment, and wages and taxes 20,000,000

Remaining Claims ($)

Accounts payable 8,000,000

Notes payable 6,000,000

Secured bond as general claim 10,000,000

Debentures 20,000,000

Subordinated debentures 6,000,000

Total 50,000,000

In the final settlement of the remaining claims, what is the amount that the Debentures will receive?

	a.	$8,000,000
	b.	$10,400,000
	c.	$2,400,000
	d.	zero, as Accounts Payable, Notes Payable and Secured bond as a general claim must be paid first