CBS Creditor Rights & Negotiations 3

Question 1

Under the Bankruptcy Code, which of the following creditors holds a 'claim' as defined in § 101(5)?

Accepted Answer

A creditor with a contingent, unliquidated tort claim

Answer

Section 101(5) broadly defines 'claim' to include contingent, unliquidated, and disputed rights to payment.

Question 2

A creditor's committee in Chapter 11 is typically composed of:

Accepted Answer

The seven largest unsecured creditors willing to serve

Answer

Under § 1102, the U.S. Trustee appoints an official committee of unsecured creditors, ordinarily including the seven largest unsecured creditors willing to serve.

Question 3

In negotiating a cash collateral order with a Chapter 11 debtor, which form of adequate protection is LEAST likely to be accepted by a secured lender?

Accepted Answer

The debtor's promise to maintain the collateral's value

Answer

An unenforceable promise without concrete security is inadequate protection; courts require tangible measures like replacement liens or cash payments.

Question 4

A landlord creditor holds a $2 million claim for future rent under a rejected commercial lease. What is the cap on the landlord's allowed claim under § 502(b)(6)?

Accepted Answer

The greater of one year's rent or 15% of the remaining lease term, not exceeding three years' rent

Answer

Section 502(b)(6) caps a landlord's rejection damages at the greater of one year's rent or 15% of remaining rent, not to exceed three years.

Question 5

Which doctrine allows a court to subordinate a creditor's claim to other creditors' claims based on inequitable conduct by the creditor?

Accepted Answer

Equitable subordination under § 510(c)

Answer

Section 510(c) authorizes courts to subordinate a claim or lien under principles of equitable subordination for inequitable conduct that harms other creditors.

(CBS) Certified Bankruptcy Specialist Practice Test

(CBS) Certified Bankruptcy Specialist Practice Test

CBS Creditor Rights & Negotiations 3