AA Widgets, Inc. files for Chapter 11 bankruptcy. It has debts of about $1 million to...

  

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AA Widgets, Inc. files for Chapter 11 bankruptcy. It has debts of about $1 million to its employees for back salary, about $3 million to 4 different banks from which it has taken loans and about $2 million to consumers whose orders it has failed to fill. AA has assets of only about $600,000 at the time of the filing. Under its plan, it will pay the employees immediately 50% of what it owes them and the rest will be discharged; it will pay the banks 75% of what it owes over the next 5 years and it will provide all of the required merchandise to the customers over the course of the next ten years (they are supposed to get their merchandise right away). Who must approve this plan for the plan to be accepted? Explain. Question Secured Properties has a perfected and secured interest in all of the clothes located at Fabrics and Plus Sizes ("Fabrics"). Sally bought several dresses from Fabrics before a debt collection proceeding commenced against Fabrics. What, if anything, would protect Sally from forfeiting the property to Secured Properties? Answer Fin AA Widgets, Inc. files for Chapter 11 bankruptcy. It has debts of about $1 million to its employees for back salary, about $3 million to 4 different banks from which it has taken loans and about $2 million to consumers whose orders it has failed to fill. AA has assets of only about $600,000 at the time of the filing. Under its plan, it will pay the employees immediately 50% of what it owes them and the rest will be discharged; it will pay the banks 75% of what it owes over the next 5 years and it will provide all of the required merchandise to the customers over the course of the next ten years (they are supposed to get their merchandise right away). Who must approve this plan for the plan to be accepted? Explain. Question Secured Properties has a perfected and secured interest in all of the clothes located at Fabrics and Plus Sizes ("Fabrics"). Sally bought several dresses from Fabrics before a debt collection proceeding commenced against Fabrics. What, if anything, would protect Sally from forfeiting the property to Secured Properties? Answer Fin

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Secured creditors are entitled to have their debts paid first in a bankruptcy proceeding In ord... View the full answer