In a voluntary settlement, one group of creditors having claims of $1,000,000 will be immediately paid 95 cents on a dollar. The remainder of the creditors will postpone payment an additional 60 days. This is an example of ________.
A) a composition
B) a combination of a composition and extension
C) an extension
D) a liquidation

Question

Quizplus · Accepted Answer

This is a combination of a composition (where one group of creditors receives immediate payment) and an extension (where the remaining creditors have postponed payment).

In a Voluntary Settlement, One Group of Creditors Having Claims