CBA Creditor Rights & Claims Flashcards
6 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CBA Creditor Rights & Claims flashcards as text
In a Chapter 11 reorganization, which class of creditors must be paid in full before equity holders receive any distribution under the absolute priority rule?
Answer: All unsecured creditors
The absolute priority rule requires that all unsecured creditors be paid in full before equity interest holders receive any value under a Chapter 11 plan.
What is a 'cramdown' in Chapter 11 bankruptcy?
Answer: Plan confirmation over the objection of a dissenting class of creditors
A cramdown allows a Chapter 11 plan to be confirmed over a dissenting class's objection if the plan meets the requirements of 11 U.S.C. § 1129(b).
Which creditors are entitled to receive post-petition interest on their claims in a solvent estate?
Answer: Secured creditors to the extent of their collateral value
Under § 506(b), oversecured creditors—those whose collateral exceeds their claim—are entitled to post-petition interest, fees, and costs.
What distinguishes a 'reclamation claim' from a standard unsecured claim in bankruptcy?
Answer: It allows a seller to recover goods delivered just before bankruptcy if the buyer was insolvent
Under § 546(c) and UCC § 2-702, a seller may reclaim goods delivered to an insolvent buyer within 45 days before the bankruptcy petition.
Under the Bankruptcy Code, which of the following debts is generally NON-DISCHARGEABLE in a Chapter 7 case?
Answer: Student loans, absent undue hardship
Student loans are non-dischargeable under § 523(a)(8) unless the debtor can demonstrate that repayment would impose an undue hardship.
What is the role of the Official Committee of Unsecured Creditors (UCC) in a Chapter 11 case?
Answer: To represent and advocate for the interests of general unsecured creditors
The UCC is appointed by the U.S. Trustee to represent unsecured creditors collectively and may investigate the debtor, negotiate plan terms, and retain professionals at estate expense.