CBA CBA Asset Administration & Liquidation 1 — Questions and Answers
Question 1: Under 11 U.S.C. § 541, which of the following is included in the bankruptcy estate?
- Post-petition wages earned by an individual debtor
- Property acquired by inheritance within 180 days after the petition date (Correct answer)
- Social Security benefits paid post-petition
- An individual debtor's future earning capacity
Correct answer: Property acquired by inheritance within 180 days after the petition date
Under § 541(a)(5), property acquired by inheritance, bequest, or devise within 180 days after the petition date becomes property of the estate.
Question 2: Which section of the Bankruptcy Code authorizes a trustee to use, sell, or lease estate property outside the ordinary course of business?
- 11 U.S.C. § 362
- 11 U.S.C. § 363 (Correct answer)
- 11 U.S.C. § 365
- 11 U.S.C. § 506
Correct answer: 11 U.S.C. § 363
Section 363 governs the trustee's authority to use, sell, or lease estate property, with court approval required for transactions outside the ordinary course of business.
Question 3: What is the primary purpose of a § 341 meeting of creditors in a bankruptcy case?
- To allow the judge to examine the debtor under oath
- To allow the trustee and creditors to examine the debtor about assets and liabilities (Correct answer)
- To vote on the proposed reorganization plan
- To approve the trustee's interim fee application
Correct answer: To allow the trustee and creditors to examine the debtor about assets and liabilities
The § 341 meeting allows the trustee and any attending creditors to examine the debtor under oath about financial affairs, assets, and liabilities.
Question 4: A Chapter 7 trustee discovers unscheduled assets after a no-asset report was filed. What should the trustee do?
- Close the case immediately
- Reopen the case and administer the newly discovered assets (Correct answer)
- Refer the matter to the FBI
- Deny the debtor a discharge
Correct answer: Reopen the case and administer the newly discovered assets
When assets are discovered after a no-asset report, the trustee should move to reopen the case so the assets can be administered for the benefit of creditors.
Question 5: What is a 'stalking horse' bidder in a § 363 sale process?
- A creditor who objects to the proposed sale
- An initial bidder who sets a floor price in exchange for bid protections (Correct answer)
- The trustee's court-appointed auctioneer
- A post-petition lender providing DIP financing
Correct answer: An initial bidder who sets a floor price in exchange for bid protections
A stalking horse bidder negotiates the initial purchase agreement and sets the minimum price, typically receiving bid protections such as a breakup fee in exchange.
Question 6: Under the Bankruptcy Code, which party has the primary duty to administer assets and make distributions to creditors in a Chapter 7 case?
- The debtor-in-possession
- The creditors' committee
- The Chapter 7 trustee (Correct answer)
- The US Trustee
Correct answer: The Chapter 7 trustee
The Chapter 7 trustee is responsible for collecting and liquidating estate property and distributing proceeds to creditors in order of statutory priority.
CBA CBA Asset Administration & Liquidation 1
Under 11 U.S.C. § 541, which of the following is included in the bankruptcy estate?