Normally, when a firm operates under the protection of a bankruptcy court, lease payments ____.
A) may be suspended
B) must continue to be paid by lessors
C) must be paid to lessors if assets are secured
D) may be suspended if they are "true" leases

Question

Quizplus · Accepted Answer

Lease payments must continue to be paid by lessors even when the firm is operating under protection of a bankruptcy court. This is because the lessors have a legal claim on the leased assets and the bankruptcy court recognizes this claim. However, the court can modify or terminate leases if it determines that doing so is in the best interest of the bankrupt firm or its creditors.

Normally, When a Firm Operates Under the Protection of a Bankruptcy