during bankruptcy proceedings of a firm, the priority of claims was not strictly adhered to. Which of the following is the least likely explanation for this outcome?
A) Senior creditors compromised.
B) The value of secured assets was less than the amount of the claims.
C) A judge's order resulted in actual claims not adhering to strict priority of claims.

Question

Quizplus · Accepted Answer

The value of secured assets being less than the amount of the claims does not directly explain why the priority of claims was not adhered to during bankruptcy proceedings. The priority of claims typically dictates the order in which creditors are paid, regardless of the value of secured assets.

During Bankruptcy Proceedings of a Firm, the Priority of Claims