Author Question: In a ________, some action the debtor takes, whether innocent or fraudulent, may cause a particular ... (Read 140 times)

debasdf · **on:** Aug 2, 2018

In a ________, some action the debtor takes, whether innocent or fraudulent, may cause a particular debt or all debts to become nondischargeable prior to the conclusion of the bankruptcy case.

A) Revocation case
B) Relenting discharge
C) Recalcitrant discharge
D) Denial of discharge

Question 2

When might a business decide to convert or be compelled to convert from a Chapter 11 case to a Chapter 7 case?

What will be an ideal response?

courtney_bruh · **Reply #1 on:** Aug 2, 2018

Answer to Question 1

D

Answer to Question 2

A conversion from Chapter 11 to Chapter 7 involves changing from reorganization to liquidation. A Chapter 11 debtor may convert to Chapter 7 liquidation if Chapter 11 was filed as a voluntary petition and the debtor is a DIP. This conversion makes sense if assets are diminishing. Creditors, for example, may have motioned the court to lift the Automatic Stay, resulting in a seizure of property. A situation may arise as it did in the Hostess bankruptcy case when the company claimed that it would be unable to reorganize unless it obtained concessions from the union in the form of cuts to wages and pension benefits. Substantial postpetition taxes and attorneys' fees may also serve to decrease the possibility of reorganization. Involuntary bankruptcies, either initially filed by creditors to force a debtor into bankruptcy or as a conversion, may be converted from a Chapter 11 to a Chapter 7 for cause. An example of cause to support an involuntary conversion from Chapter 11 to Chapter 7 is the unlikelihood that the debtor will be able to make payments under the reorganization plan and rehabilitate its business affairs.