4. Bartleby Corporation is undergoing liquidation under Chapter 7 of the bankrup

Question

4. Bartleby Corporation is undergoing liquidation under Chapter 7 of the bankruptcy code. Bartleby reports total liabilities of $820,000. Its assets have a liquidation value of $650,000. Of those assets, $300,000 is pledged as security on debt obligations of $220,000, and another $120,000 is pledged as security on $180,000 of liabilities. Unsecured liabilities with priority are $30,000.

Calculate the net proceeds available to unsecured creditors without priority, and the dividend rate that they will receive under the liquidation.

Explanation / Answer

The net proceeds available to unsecured creditors without priority = total liabilities - $300,000 is pledged as security on debt obligations of $220,000 - another $120,000 is pledged as security on $180,000 of liabilities - Unsecured liabilities with priority are $30,000.

= 820,000 - 220,000 - 120,000 - 30,000

= $450,000

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.