Management and Organizational Studies 2275A/B Chapter Notes - Chapter 27: Unfair Prejudice In United Kingdom Company Law, Unsecured Creditor, Secured Creditor

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

If a company cant cope with a debt or other financial obligations, there are options o. Negotiated settlement: convince creditors you can save the business, compromise payments. Could have professional facilitator to reach an agreement. More creditors = less likely there"ll be an agreement. Ensure all creditors are in agreement: will agree if they think its good for them lt. If there"s no agreement and financial situation doesn"t improve, search for more formal alternatives. Insolvent: unable to meet financial obligations as they become due or having insufficient assets, if liquidated, to meet financial obligations and owes more than : assets mkt value < liabilities o. Factual matter of assets/liabilities or ability to pay debts o. Bankruptcy is a legal mechanism where assets of an insolvent person are transferred to trustee, liquidated, and net proceeds are distributed to creditors in a manner determined by bia. Insolvent debtor can avoid bankruptcy by making a proposal or entering into an agreement with creditors.