_____ Vannco, Inc., is being liquidated under Chapter 7 of the bankruptcy statutes. Unsecured creditors will be paid at the rate of $.30 on the dollar. Lendorf is owed a $70,000 noninterest-bearing note receivable from Vannco collateralized by equipment having a book value of $60,000 and a liquidation value of $20,000. How much will Lendorf realize on this note?

Question

Quizplus · Accepted Answer

Lendorf will receive $21,000 from the liquidation of the equipment ($20,000) and an additional $15,000 from the unsecured creditors' distribution ($70,000 x .30).