Should P&Y Energy Co$.$ Liquidate or Reorganize?Over the last decade, oil prices have been declining due to od oversupply. In $2020,$ the COVID$-19$ pandemic added fuel to the fire. The impact of the pandemic hammered the oil industry, forcing oil prices to go negative for the first time on record. Oil producers were faced with a glut of crude oil that left them scrambling to find space to store the oversupply. The P&Y Energy Co$.$ is one of those companies experiencing financial distress in the oil industry, Mike Roberts, a trustee in bankruptcy, is analyzing P&Y and evaluating distribution proposals under liquidation or reorganization of the companyBonds with a face value of $$1$ billion are secured by a mortgage on the company's oil assets, which have a market value of $$5$ billion. P&Y has subordinated debentures outstanding in the amount of $$19$ billion. Shareholders' equity has a book value of $$3$ billion. Under liquidation, $$0\mathrm{.}5$ billion is used to cover administrative costs and other claims $($including unpaid wages, pension benefits, legal fees, and taxes$).$ The company has a liquidating value of $$20$ billion and a going$-$concern value of $$22$ billion. Under reorganization, the secured bonds will receive debentures in the value of $90$ cents on the dollar, and the subordinated debentures will receive any remaining value as equity.Mike wishes to follow the bankruptcy law strictly. What is the proposed distribution under liquidation? What is the proposed distribution under reorganization? Which proposed distribution should Mike choose?