Which statement is true?
A)A prepack is a plan of liquidation used to distribute a firm's assets.
B)Bankruptcy courts have "cram-down" powers.
C)The absolute priority rule must be strictly followed in all bankruptcy proceedings.
D)Creditors cannot force a firm into bankruptcy even though they might like to do so.
E)A reorganization plan can be approved only if the firm's creditors all agree with the plan.

Question

Quizplus · Accepted Answer

Bankruptcy courts have "cram-down" powers, which allow them to approve a reorganization plan even if not all classes of creditors agree, as long as certain legal requirements are met.

Which Statement Is True