Practice Test Geeks(CBA) Certified Bankruptcy Administrator Practice Test
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CBA Asset Administration & Liquidation Flashcards

6 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CBA Asset Administration & Liquidation flashcards as text

  1. In a Chapter 11 case, what is 'DIP financing' and why is it critical to the reorganization process?

    Answer: Debtor-in-possession financing that provides liquidity to operate during bankruptcy

    DIP financing is post-petition lending that provides the debtor-in-possession with the cash needed to fund operations during the reorganization, often granted super-priority status.

  2. What is a 'carve-out' in the context of DIP financing?

    Answer: A portion of secured collateral reserved for professionals' fees and US Trustee fees

    A carve-out is a negotiated exception to a DIP lender's lien that reserves a defined amount to pay professionals' fees and US Trustee fees so the case can be properly administered.

  3. Under 11 U.S.C. § 554, what happens to property the trustee formally abandons?

    Answer: It is returned to the debtor and is no longer property of the estate

    Upon abandonment under § 554, property reverts to the debtor and is no longer part of the bankruptcy estate, relieving the trustee of any obligation to administer it.

  4. What is the role of a 'professional person' retained by the trustee or DIP under 11 U.S.C. § 327?

    Answer: An attorney, accountant, or other expert employed by the estate subject to court approval

    Section 327 requires court approval for the trustee or DIP to employ attorneys, accountants, or other professionals, who must be disinterested and hold no adverse interest to the estate.

  5. Which of the following best describes a 'no-asset' Chapter 7 case?

    Answer: All of the debtor's non-exempt assets have no value for distribution to creditors

    A no-asset case is one where the debtor's non-exempt assets are either non-existent or have no meaningful value after accounting for exemptions and liens, leaving nothing to distribute to unsecured creditors.

  6. What is the purpose of the US Trustee Program in the administration of bankruptcy cases?

    Answer: To serve as a supervisory arm overseeing the integrity of the bankruptcy system and appointing trustees

    The US Trustee Program is a component of the Department of Justice that oversees the administration of bankruptcy cases, appoints and supervises trustees, and monitors compliance with the Bankruptcy Code.