LAW 603 Lecture Notes - Lecture 9: Insurance Policy, Unsecured Creditor, Risk Management
23 Aug 2016
School
Department
Course
Professor
Document Summary
More than 80% of small businesses fail within 5 years not just small businesses that fail large business also fail (i. e. nortel) Enormous monetary and non- monetary costs cost affect creditors, debtors, Insolvent: debts exceed assets or unable to meet liabilities as they become due does not mean someone is bankrupt. Unable to meet obligations as they fall due. Debtor ceased paying current obligations in the ordinary course of business. Value of assets less total obligations many businesses operate at or near insolvency, from time to time. Bankrupt: assignment into bankruptcy vs. being petitioned into bankruptcy by a creditor cannot have bankruptcy without insolvency (bankrupt is a legal matter) Being insolvent plus either voluntarily declared bankruptcy or petitioned into bankruptcy. Liquidation: sale of debtor"s assets into 2694$ that is distributed to creditors. Discharge: release of a debtor from bankruptcy status freedom from pre- bankruptcy debt a fresh start.
