Legal Contracts And Bankruptcy Essay

637 words - 3 pages

Should the petition for involuntary bankruptcy be granted? Explain.There's two ways that we can at this. If Beren felt that the $200000 was not going to be repaid to the bank then he had more than an adequate right to file an involuntary petition. If the partners felt that they had enough money to finish the job, recoup their losses, and pay back the bank, then Beren had no right to file the petition. In this case, an involuntary injunction is "a petition filed by creditors of the debtor; alleges that the debtor is not paying his or her debts as they come due" (Cheeseman 2004). It seems to be the instance in this case that the partnership was overcompensated and were way in over their heads. They already owed debts that approximately drew around $380000. From the information above we can make a guess that the partnership had a basic price range allocated for the renovation. This is why they borrowed exactly two hundred thousand dollars, no more no less. They had gone over the amount of money they wanted to spend so you have to assume that they were not going to have the money to cover the loan. The petition for involuntary bankruptcy should be granted under these assumptions. Another position that could be taken from the statement is Beren went to the other partner to try to obtain more capitol and was unsuccessful. If the other members wanted to have the obligation to stop the petition, they could have provided more money to the renovation. Since they didn't finance more money to the renovation, they have no bounds to stop the petition.Can the bankruptcy court confirm the debtor's plan of reorganization? Explain.Reorganization Bankruptcy is "to reorganize the debtor with a new capitol structure so that it will emerge from bankruptcy as a viable concern" (Cheeseman 2004). The debtor has the limited right to propose a plan of...

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