Cengage Advantage Books: Business Law Today, The Essentials 11th Edition by Roger LeRoy Miller

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Distribution of Property. Montoro petitioned himself into voluntary bankruptcy. There were three major claims against his estate. One was made by Carlton, a friend who held Montoro's negotiable promissory note for $2,500. Another was made by Elmer, Montoro's employee, who claimed that Montoro owed him three months' back wages of $4,500. The last major claim was made by the United Bank of the Rockies on an unsecured loan of $5,000. In addition, Dietrich, an accountant retained by the trustee, was owed $500, and property taxes of $1,000 were owed to Rock County. Montoro's nonexempt property was liquidated, with proceeds of $5,000. Discuss fully what amount each party will receive, and why. (See Chapter 7-Liquidation.)