The legal proceeding for liquidating or reorganizing a ﬁrm operating in default is called a
A) Tender offer.
B) Bankruptcy.
C) Merger.
D) Takeover.
E) Proxy ﬁght.

Question

Quizplus · Accepted Answer

The legal proceeding for liquidating or reorganizing a firm operating in default is called bankruptcy. A bankruptcy filing may lead to liquidation, where the assets of the company are sold to pay off creditors, or reorganization, where the company continues to operate under court supervision while it repays its debts and restructures.

The Legal Proceeding for Liquidating or Reorganizing a ﬁRm Operating