Exam 23: Debtor Creditor Relations And Bankruptcy

Free met with Ara,the president of ABC Bank,to discuss Free's difficulty making the payments on a loan that was guaranteed by Shia.Free requested that Ara provide a grace period to Free and allow for a few missed payments without penalty in order to catch up other finances.Ara had no objection.Assuming the guaranty agreement did not address such situations,is Ara acting prudently and why or why not?

In CASE 23.2 Executive Benefits Insurance Agency v.Arkison (2014)the U.S.Supreme Court ruled that some claims Congress labeled as "core" (so-called Stern claims)cannot be adjudicated by a bankruptcy court even if all the parties consent to the bankruptcy court's jurisdiction in advance.

What portion of the bankruptcy code deals with an international insolvency situation,and how does it work? On what international law is it based?

Which of the following is considered a negative covenant?

In a(n)__________ loan,more than one lender enter into concurrent direct obligations with the borrower to make the loan.

Waivers are the borrower's promises that it will or will not take specific actions as long as either a commitment or a loan is outstanding.

In CASE 23.1 Tufankjian v.Rockland Trust Co.(2003)Tufankjian signed a contract to acquire a Toyota dealership for $1.4 million.Rockland agreed to lend Tufankjian $700,000 at 7.5% interest,with the remaining $700,000 to come from the SBA at a separate interest rate which was quoted by Rockland at 6.5% (but with no written guaranty).Ultimately,the loan was not consummated and Tufankjian sued.How did the court rule?

Bank president Spencer had approved significant loan amounts to Berry for the purpose of developing a shopping center.Spencer was satisfied that the land collateralizing the shopping center loan was sufficient,and Spencer was not particularly concerned about that loan.Berry,however,requested an additional loan for the purpose of starting a temporary employee agency.Berry offered to collateralize that loan with office equipment,but Spencer was uneasy that such collateral was insufficient.If Spencer decides to go forward with the loan involving the temporary employee agency,which of the following is true regarding Spencer's options?

A state law that limits the maximum rate of interest that may be charged is called a(n)__________ law.

Which of the following statements about the zone of insolvency is NOT true?

Which of the following is NOT true regarding methods of perfection?

Requirements that must be met under the loan agreement before the lender's obligations arise are known as:

The UCC provides that,unless otherwise agreed,a security agreement gives the secured party a security interest in the proceeds if collateral is sold,exchanged,collected,or otherwise disposed of.

The debtor-in-possession must honor all prebankruptcy executory contracts.

In Stern v.Marshall,the U.S.Supreme Court addressed whether a counterclaim for tortuous interference with an expected gift,filed in response to a bankruptcy claim for defamation,was a core matter subject to the jurisdiction of the bankruptcy court.And if it was a core matter subject,did the authority conferred upon the bankruptcy court violate Article III of the U.S.Constitution? How did the Court rule?

A commitment fee is assessed against a lender at the time a loan agreement is signed.

Congress is given the power to enact bankruptcy laws by:

A(n)__________ guaranty is enforceable only with respect to a specified transaction or series of transactions.

Which of the following statements about Chapter 11 bankruptcy is NOT true?

Payments in the ordinary course of business made within 90 days prior to a Chapter 11 bankruptcy filing are voidable as a preference.