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Unformatted text preview: st chance of
recovering part of their investment.
• The debtor, possibly with the aid a key creditor,
arranges a meeting between itself & all creditors.
• At the meeting, a committee of creditors is
selected to investigate and analyze the debtor’s
situation & recommend a plan of action.
situation # Voluntary Settlements to Sustain The Firm
1. Extension : An arrangement whereby the
firm’s creditors receive payment in full,
although not immediately.
2. Composition : A pro rata cash settlement
of creditor claims by the debtor firm; a
uniform percentage of each dollar owed is
3. Creditor Control : An arrangement in
which the creditor committee replaces the
firm’s operating management and operates
the until all claims have been settled. # Voluntary Settlements Resulting in Liquidation
A Voluntary liquidation procedure by which a firm’s
creditor pass the power to liquidate the firm’s
assets to an adjustment burea...
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- Spring '09