If a lease contract is characterized as a true lease in bankruptcy,the lessor is in a somewhat inferior position than the lender if the firm defaults.

Question

Quizplus · Accepted Answer

In a bankruptcy situation, a true lease allows the lessor to reclaim their property, putting them in a potentially better position than unsecured lenders who may have to wait for the distribution of the bankrupt entity's assets.

If a Lease Contract Is Characterized as a True Lease