Question: Need help please A firm is facing financial difficulties due to overleverage and decides to file for bankruptcy. Administrative costs and fees amount to 5%
Need help please
A firm is facing financial difficulties due to overleverage and decides to file for bankruptcy. Administrative costs and fees amount to 5% of the "going concern" value which is expected to be 39.6 million. The following table shows the firms current balance sheet: Assets Equity and Liabilities Current Assets 7 Current Liabilities 8 Fixed Assets 59 Senior Debt 47 Junior Debt 24 Equity 28 51% of the senior claim is secured by fixed assets. According to rules of priority, how much of the proceeds should be distributed to Current Liabilities
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