Question 1

In theStern v.Marshall case discussed in the text,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?

Accepted Answer

A)  The Court ruled that the tortuous interference counterclaim was a core proceeding but that the bankruptcy court lacked the constitutional authority to enter a final judgment on the claim. 
B)  The Court ruled that the tortuous interference counterclaim was a core proceeding and that the bankruptcy court had the constitutional authority to enter a final judgment on the claim. 
C)  The Court ruled that the tortuous interference counterclaim was not a core proceeding and that the bankruptcy court lacked the constitutional authority to enter a final judgment on the claim. 
D)  The Court ruled that the tortuous interference counterclaim was a core proceeding in part and that the bankruptcy court had the constitutional authority to enter a final judgment on portions of the claim.

Question 2

An equipment lease that serves the purpose of financing is known as a(n)__________ lease.

Accepted Answer

A)  credit 
B)  finance 
C)  unterminal 
D)  revokable

Question 3

Which of the following makes a security interest created under Article 9 a floating lien?

Accepted Answer

A)  The provision that, unless otherwise agreed, a security agreement gives the secured party a security interest in the proceeds if the collateral is sold, exchanged, collected, or otherwise disposed of. 
B)  The provision that, unless otherwise agreed, a security agreement fails to give the secured party a security interest in the proceeds if the collateral is sold, exchanged, collected, or otherwise disposed of. 
C)  The provision that, unless otherwise agreed, interest rates will vary depending on the prime rate of interest. 
D)  The provision that, unless otherwise agreed, the parties will not sell, exchange, collect, or otherwise dispose of property and that if such an action is taken, all sums owed become immediately due.

Question 4

Discuss the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA")in regards to whether Chapter 7 or Chapter 13 relief is appropriate.

Accepted Answer

The answer of Discuss the Bankruptcy Abuse Prevention and Consumer...

Question 5

A __________ is an agreement whereby one or more creditors of a common debtor agree to defer payment of their claims until another creditor of the same debtor is fully paid.

Accepted Answer

A)  participation loan 
B)  cross-collateralization 
C)  debt subordination 
D)  lien subordination

Question 6

A provision in a loan agreement that the borrower cannot incur additional debt beyond a certain amount is an example of a(n)__________ covenant.

Accepted Answer

A)  absolute 
B)  prohibitive 
C)  negative 
D)  affirmative

Question 7

After-acquired property is property that the debtor acquires after the repayment of a loan under a security agreement.

Accepted Answer

A) True 
 B)False

Question 8

An equipment lease that serves the purpose of financing is known as a(n)__________ lease.

Accepted Answer

A)  finance 
B)  temporary 
C)  lending 
D)  debtor's

Question 9

In a __________ bankruptcy under Chapter 11,the debtor solicits votes on its plan of reorganization and only files for Chapter 11 protection after it has obtained the required votes in favor of the plan.

Accepted Answer

A)  preapproved 
B)  preplanned 
C)  prepackaged 
D)  prenegotiated

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

In order to reflect the greater risk to the lender,secured loans are priced at a higher rate than unsecured loans.

Accepted Answer

A) True 
 B)False

Question 12

In CASE 23.3United States Department of Justice v.Sperry (2013),Sperry,the sole owner of a Subchapter S corporation that filed bankruptcy,made paymentstoother creditors before paying the corporation's federal tax obligations.Sperrycountered that he was released from the tax liens,and claimed the corporation-not him-owed the 'trust fund taxes.' The IRS sued.How did the court rule and why?

Accepted Answer

A)  For the IRS, because Sperry was never properly incorporated and was therefore personally liable. 
B)  For Sperry, because the Subchapter S corporation-not Sperry-was liable for the tax obligations. 
C)  For the IRS.Sperry's payments and loans triggered personal liability. 
D)  For Sperry, because the IRS failed to give proper notice before seizing the company's assets.

Question 13

Several commentators have criticized the Bankruptcy Code as too easily excusing individuals and businesses from honoring their lawful obligations.From a societal standpoint,do you believe that the Bankruptcy Code plays a positive role in social and economic relationships? What changes,if any,would you recommend?

Accepted Answer

The answer of Several commentators have criticized the Bankruptcy Code...

Question 14

Set forth the five events referenced in the text that usually constitute events of default.

Accepted Answer

The answer of Set forth the five events referenced in...

Question 15

National banks acting as lenders are subject to state usury laws.

Accepted Answer

A) True 
 B)False

Question 16

With a(n)__________ guaranty,subsidiaries guarantee,or pledge their assets as security for,the parent's debt.

Accepted Answer

A)  downstream 
B)  upstream 
C)  leveraged 
D)  subordination

Question 17

In theIn re Bryan Road casereferencedin the text,the main issue before the Florida court was whethera pre bankruptcy waiver of the automatic stay in a prepetition workout was enforceable.How did the court rule?

Accepted Answer

A)  After considering a number of factors, the court concluded that the waiver of the automatic stay would be enforced. 
B)  The court ruled as a matter of law that such agreements are contrary to the principles set forth in the federal bankruptcy statutes and that such agreements are, therefore, unenforceable. 
C)  The court ruled as a matter of law that such agreements are enforceable. 
D)  The court ruled that such agreements are enforceable only if all other creditors are paid in full.

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

__________ creditors must file a __________ stating the amount of their claim in a form provided by the bankruptcy court within time periods established by the jurisdiction in which the case if filed.

Accepted Answer

A)  Unsecured, notice 
B)  Unsecured, proof of claim 
C)  Unsecured, automatic stay 
D)  Secured, reaffirmation agreement

Question 20

A purchase-money security interest in consumer goods is automatically perfected.

Accepted Answer

A) True 
 B)False

Exam 23: Debtor-Creditor Relations and Bankruptcy.

An equipment lease that serves the purpose of financing is known as a(n) __________ lease.

Which of the following makes a security interest created under Article 9 a floating lien?

Discuss the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA")in regards to whether Chapter 7 or Chapter 13 relief is appropriate.

A __________ is an agreement whereby one or more creditors of a common debtor agree to defer payment of their claims until another creditor of the same debtor is fully paid.

A provision in a loan agreement that the borrower cannot incur additional debt beyond a certain amount is an example of a(n) __________ covenant.

After-acquired property is property that the debtor acquires after the repayment of a loan under a security agreement.

An equipment lease that serves the purpose of financing is known as a(n) __________ lease.

In a __________ bankruptcy under Chapter 11,the debtor solicits votes on its plan of reorganization and only files for Chapter 11 protection after it has obtained the required votes in favor of the plan.

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

In order to reflect the greater risk to the lender,secured loans are priced at a higher rate than unsecured loans.

Set forth the five events referenced in the text that usually constitute events of default.

National banks acting as lenders are subject to state usury laws.

With a(n) __________ guaranty,subsidiaries guarantee,or pledge their assets as security for,the parent's debt.

In theIn re Bryan Road casereferencedin the text,the main issue before the Florida court was whethera pre bankruptcy waiver of the automatic stay in a prepetition workout was enforceable.How did the court rule?

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.

creditors must file a stating the amount of their claim in a form provided by the bankruptcy court within time periods established by the jurisdiction in which the case if filed.

A purchase-money security interest in consumer goods is automatically perfected.