Why do creditors usually accept a Chapter 11 reorganization instead of demanding a Chapter 7 liquidation?
A. Profits earned from liquidation are subject to alternative minimum tax
B. Creditors might collect more from a reorganized firm, in the long run, than a liquidated firm
C. The amount of debt forgiveness is not deductible for income tax purposes by the creditors
D. Debt cannot be written off GAAP-based income statements
E. None of the above

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Answer B Creditors might collect more from a reorganized firm in t... View the full answer