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Bankruptcy Law and Bank Notes

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Sonia's Sorrows

Sonia, a book dealer, has the following assets: a building worth $155,000, accounts receivable amounting to $32,500 due within the next three months, and $25,000 cash in the bank. Sonia's sole liability is a $300,000 note due tomorrow, and she is unable to pay it. Can Sonia be forced into involuntary bankruptcy under the Bankruptcy Code?

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Solution Summary

This solution discusses Sonia's chances of being forced into involuntary bankruptcy. All relevant facts and laws are discussed and cited in the solution.

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Sonia has liquid assets worth $57,500. The building cannot be easily converted to cash and wouldn't be considered a liquid asset. Since her debt is greater than the minimum for involuntary bankruptcy of $14,425, ...

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