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Bankruptcy

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The law firm is in the process of purchasing a number of new company desktop computers, printers, notebook computers and servers. Your firm is planning to borrow money from a bank to complete the transaction. The IT manager who is in charge of the transaction does not understand what type of contract the company is entering into with the bank, or what most of the legal terminology means. Your supervising partner wants you to prepare an outline to assist the IT Manager.

Specifically, your supervising partner wants you to explain secured and unsecured debt and what occurs if the firm defaults on the agreements to purchase the technology equipment.

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Solution Preview

Explain the basic concepts surrounding bankruptcy.

The law firm is in the process of purchasing a number of new company desktop computers, printers, notebook computers and servers. Your firm is planning to borrow money from a bank to complete the transaction. The IT manager who is in charge of the transaction does not understand what type of contract the company is entering into with the bank, or what most of the legal terminology means. Your supervising partner wants you to prepare an outline to assist the IT Manager. Specifically, your supervising partner wants you to explain secured and unsecured debt and what occurs if the firm defaults on the agreements to purchase the technology equipment.

The first type of loan is a secured debt. In this some asset of the company and in this case the computers, printers, notebook computers and servers are pledged to the bank. If your company defaults in making ...

Solution Summary

This solution gives you an indepth explanation about the basic concepts surrounding bankruptcy.

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