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Liquidation- How much creditors and shareholders receive

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Tundra Tots is being liquidated under Chapter 7 of the Bankruptcy Act. Its current balance sheet is attached.

Fixed assets are sold for $25,000,000 and current assets are sold for $18,000,000. All fixed assets are pledged as collateral for mortgage bonds. Subordinated debentures are subordinate only to notes payable. Trustee costs are $500,000. No employee is owed over $2,000.

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The solution explains how to calculate the amount that the creditors and shareholders receive in a liquidation

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