Ratner's Service Centre encountered financial setbacks over a period of time,and eventually found itself insolvent.Among its creditors were the first and second mortgagees of the land and building which Ratner's owned,trade creditors,employees who had not been paid wages,and the municipality,for arrears of property taxes.Ratner's decides not to make a proposal to its creditors.If the mortgagees dispose of the land and building,and the proceeds are sufficient to pay the first mortgage in full,and one half of the second,the second mortgagee may claim for the balance in the bankruptcy as an unsecured creditor.

Question

Quizplus · Accepted Answer

The statement is true. In case Ratner's does not make a proposal to its creditors and the mortgagees dispose of the land and building, the proceeds will be used to pay the first mortgagee in full, and half of the second mortgagee. The remaining balance will be treated as an unsecured claim in the bankruptcy proceedings.

Ratner's Service Centre Encountered Financial Setbacks Over a Period of Time,and