A(n) ________ is a pro rata cash settlement of creditor claims.

Question

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A composition is a voluntary agreement between a debtor and creditors where the debtor agrees to pay a pro rata cash settlement of creditor claims in exchange for release from further liability. This is different from a liquidation where assets are sold to pay off creditors or an extension where payment terms are extended but the full amount is still owed. A creditor control agreement is not a common term in bankruptcy or debt restructuring.

A(n) ________ Is a Pro Rata Cash Settlement of Creditor