Ratner's Service Centre encountered financial set backs 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.Municipal taxes take priority over trade creditors in the distribution of the assets of the bankrupt firm.

Question

Quizplus · Accepted Answer

According to the scenario, the municipality's arrears of property taxes take priority over the trade creditors in the distribution of assets of the bankrupt firm. This means that the municipality will be paid before the trade creditors receive any payment.

Ratner's Service Centre Encountered Financial Set Backs Over a Period