Preview Questions Chapter 11 Attorney | Role Specific Skill

Question 1: In a Chapter 11 case, what happens if a debtor fails to confirm a reorganization plan?

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The case automatically reverts to a Chapter 13 proceeding

The case may be dismissed, or the debtor may be converted to a Chapter 7 liquidation

The debtor is automatically discharged from all debts

The debtor may be granted additional time to submit a revised plan

Question 2: How does the debtor's right to propose a "plan of liquidation" affect the Chapter 11 process?

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It forces the debtor to sell all assets immediately

It automatically terminates the Chapter 11 case

It guarantees creditor approval of the liquidation plan

It allows the debtor to propose liquidation in lieu of reorganization if reorganization is not feasible

Question 3: In the context of creditor negotiations, how do you handle the "liquidation analysis" to show creditors the potential recovery in Chapter 11 versus Chapter 7?

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By offering creditors immediate liquidation of assets

By focusing on the debtor's historical performance instead of liquidation options

By demonstrating that Chapter 7 would result in the creditor receiving less recovery than through Chapter 11 reorganization

By ignoring the potential liquidation value and focusing only on the reorganization plan

Question 4: How does the debtor's right to reject contracts help during the reorganization process?

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The debtor can only reject contracts with the approval of creditors, not the court.

The debtor can reject contracts or leases that are unprofitable or hinder reorganization, subject to court approval.

The debtor is required to honor all contracts regardless of their financial impact.

The debtor is prohibited from rejecting any contracts during Chapter 11.

Question 5: Which of the following factors must be considered when determining the feasibility of a Chapter 11 reorganization plan?

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The debtor's ability to repay its debts in full after reorganization

The likelihood that the debtor will achieve profitable operations post-reorganization

The impact of the reorganization on the debtor's employees

The total amount of debt the debtor owes to creditors

Question 6: What does "subordination" mean in the context of Chapter 11 bankruptcy?

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The ranking of claims based on their priority for repayment in the reorganization plan

The extension of deadlines for certain creditors to file claims

The conversion of equity into unsecured debt in the reorganization plan

The reduction of debt owed to the debtor's creditors