Legal Question in Bankruptcy in Hawaii
How are Corporate Assetts Liquidated under Chaper 7 Involuntary Bankruptcy?
Are creditors paid in full first and then trustee with the balance shared between the preferred then common shareholders? What happens if the assetts are smaller than the creditor debt in regards to the shareholders?
Basically what do the Federal Laws State? Where can I find these Rules and laws?
1 Answer from Attorneys
Title 11 of the United States Code Annotated
You can get these book in any law library or on the Internet in the library of Congress or many other sites.The administrative expenses including trustee's commissions, the secure creditors, the preferences and tax liens all are paid first, second come the unsecure creditors that share a prorrate of what is left in the estate.The shareholders get nothing.This is answer in the most general sense and there exist many rules and exeptions so I recommend getting a lawyer that look up your specific facts and the state law applicable.
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