Pico has put his fashion clothing company into bankruptcy due to poor business conditions at the mall where the company's sole outlet is located.The company has secured, preferred, and general unsecured creditors.Only secured creditors will be permitted to immediately realize on their claims against the company.Other creditors will have to wait until the company's assets are liquidated for their share of the distribution.At that time, there may be nothing left, but this is a risk that they took when they extend credit to Pico's company.

Question

Quizplus · Accepted Answer

This is true as per the given scenario that only secured creditors will be permitted to immediately realize on their claims against the company while other creditors will have to wait for the liquidation of the assets for their share of distribution, and there may be a possibility that nothing may be left for them.

Pico Has Put His Fashion Clothing Company into Bankruptcy Due