Preview Questions Insolvency Specialist | Role Specific Skill

Question 1: In insolvency law, what constitutes a "reorganization" under Chapter 11?

Which action should you take?

Choose only one option

It allows the debtor to avoid paying creditors entirely

It involves restructuring the debtor's debts and operations in order to return to profitability

It refers to the complete liquidation of the debtor's assets

It focuses on debt forgiveness without any changes to operations

Question 2: What is the role of an Insolvency Specialist when financial distress is suspected in a company's management structure?

Which action should you take?

Choose only one option

The lawyer should only focus on the company's debts, ignoring management structure

The lawyer must evaluate whether management's actions contributed to the financial distress and whether the board is acting in the company's best interest

Management's role is irrelevant unless the company enters liquidation

The lawyer can take no action unless the company has officially filed for bankruptcy

Question 3: How does "cross-border insolvency" impact corporate restructuring for multinational companies?

Which action should you take?

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Cross-border insolvency requires coordination between different jurisdictions to manage assets and debts across borders

Cross-border insolvency accelerates the bankruptcy process and reduces the time required for restructuring

Cross-border insolvency does not involve corporate restructuring and only applies to debt recovery

Cross-border insolvency applies only to domestic companies with foreign subsidiaries and does not affect the parent company

Question 4: How does an Insolvency Specialist deal with claims of fraudulent conveyance when pursuing debt recovery in a case where the debtor has transferred assets to a third party?

Which action should you take?

Choose only one option

The lawyer must investigate the transfer, file an adversary proceeding to reverse the transfer, and recover the assets

Fraudulent conveyance claims can only be filed in civil court, not bankruptcy

Fraudulent transfers are automatically voided without needing legal action

The lawyer should ignore fraudulent transfers if they are within the statute of limitations

Question 5: In Chapter 11 bankruptcy proceedings, what is the "plan of reorganization"?

Which action should you take?

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The plan of reorganization outlines how the debtor intends to repay creditors and restructure the business

The plan of reorganization allows the debtor to liquidate their assets and discharge all debts

The plan of reorganization applies only to secured creditors and not to unsecured creditors

The plan of reorganization is a financial summary that does not affect creditor claims

Question 6: What should an Insolvency Specialist do if a company in distress lacks sufficient funds to cover its operational costs during the restructuring process?

Which action should you take?

Choose only one option

The lawyer should recommend liquidation immediately

The lawyer should advise halting all operations until financing is secured

The lawyer should explore financing options, including debtor-in-possession financing, and work with creditors to extend payment terms

The lawyer should ignore funding issues if the restructuring is approved