Liquidating Value Claims
Trade Credit $3000
Secured mortgage notes $6000
Senior debentures $5000
Junior debentures $9000
Total Assets $15,500 Book Equity -$7500
Assuming there are no legal fees associated with the bankruptcy, as trustee, what distribution of liquidating value do you propose?
At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the following Total claim of creditors
Trade Credit = $3000
Secured Mortgage notes =$6000
Creditor claims total $23,000 and the liquidation proceeds are only $15,500. Liquidation proceeds are insufficient to satisfy the claims of creditor. Thus, shareholders will not receive any payment.
Mortgage notes ...
The solution examines the beacon computer proposed distribution of liquidation value.