BLTC-9eSample Answer for End-of-Chapter Hypothetical Question with Sample AnswerChapter 26: Bankruptcy26–2 Hypothetical Question with Sample Answer Runyan voluntarily petitions for bankruptcy. He has three major claims against his estate. One is by Calvin, a friend who holds Runyan’s negotiable promissory note for $2,500; one is by Kohak, an employee who is owed three months’ back wages of $4,500; and one is by the First Bank of Sunny Acres on an unsecured loan of $5,000. In addition, Martinez, an accountant retained by the trustee, is owed $500, and property taxes of $1,000 are owed to Micanopa County. Runyan’s nonexempt property has been liquidated, with the proceeds totaling $5,000. Discuss fully what amount each party will receive, and why.Sample Answer:The Bankruptcy Code establishes a payment priority of claims from the debtor’s estate. Each class of debt in this priority list must be fully paid before the next
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