Preview Questions Insolvency Specialist | Role Specific Skill

Question 1: What is the significance of "fraudulent transfers" in the context of debt recovery in insolvency?

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Fraudulent transfers are any assets sold below market value and are not reversible

Fraudulent transfers occur when a debtor transfers assets with the intent to hinder, delay, or defraud creditors and can be reversed by the trustee

Fraudulent transfers are automatically forgiven once the bankruptcy petition is filed

Fraudulent transfers only apply to family members of the debtor and do not affect third-party creditors

Question 2: What does "pre-packaged bankruptcy" mean in corporate restructuring?

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It is a type of liquidation plan where assets are sold in advance

It allows a company to declare bankruptcy without any prior restructuring effort

A pre-packaged bankruptcy involves negotiating a restructuring plan before filing for bankruptcy, allowing a faster resolution

It involves resolving creditor disputes before filing for bankruptcy

Question 3: What is the significance of "secured creditor claims" in the liquidation process?

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Secured creditor claims have priority in the liquidation process, and they are repaid first from the sale of specific collateral

Secured creditors are treated the same as unsecured creditors in the liquidation process

Secured creditors must be repaid in full before the liquidation process begins

Secured creditor claims are always paid last in the liquidation process, after all unsecured claims are settled

Question 4: What is the role of a "creditors' committee" in corporate restructuring, and how does it affect the restructuring outcome?

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The creditors' committee has no influence on the restructuring process

The creditors' committee represents the interests of unsecured creditors and helps negotiate the terms of the restructuring

The creditors' committee only serves as a formal body that monitors the debtor's operations

The creditors' committee automatically determines the restructuring outcome

Question 5: What is the significance of "priority claims" during corporate restructuring?

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Priority claims are only considered after all unsecured debts have been settled

Priority claims are claims that must be paid first in the event of liquidation or restructuring, often affecting the restructuring plan

Priority claims must always be paid in full before any creditor payments

Priority claims refer to the debtor's own debts that take precedence over all other claims

Question 6: When advising a client on debt recovery, what is the first legal action an Insolvency Specialist should consider after the client has missed payments?

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The lawyer should immediately file for bankruptcy to avoid further risk

The lawyer should send a demand letter to the debtor, outlining the debt and requesting payment

The lawyer can wait until the debt is more than 180 days past due before acting

The lawyer can proceed with contacting the debtor's co-signers without prior communication