Which one of the following statements is correct?
A) All Chapter 7 bankruptcy filings must include a "workout" agreement.
B) Firms must remain in bankruptcy for at least 18 months.
C) Key employee retention plans (KERPS) are no longer legal.
D) Labor contracts cannot be modified through the bankruptcy process.
E) A firm can file for Chapter 11 bankruptcy even if the firm is solvent.

Question

Quizplus · Accepted Answer

A firm can file for Chapter 11 bankruptcy even if the firm is solvent. The other options are incorrect - a "workout" agreement is not required for Chapter 7 bankruptcy filings, there is no minimum or maximum amount of time a firm must remain in bankruptcy, key employee retention plans (KERPS) are legal, and labor contracts can be modified through the bankruptcy process.

Which One of the Following Statements Is Correct