CIRA CIRA Bankruptcy & Restructuring Procedures

Question 1

What is the primary purpose of the 'automatic stay' that takes effect upon a Chapter 11 bankruptcy filing?

Accepted Answer

To immediately halt most collection actions and lawsuits against the debtor

Answer

To freeze the debtor's management in place permanently

Answer

To prohibit the debtor from paying any employees

Answer

To require all vendors to continue supplying the debtor

Question 2

Which party typically files a 'proof of claim' in a Chapter 11 bankruptcy case?

Accepted Answer

A creditor asserting a right to payment from the debtor's estate

Answer

The debtor's management team

Answer

The U.S. Trustee's office

Answer

The bankruptcy court judge

Question 3

In a Chapter 11 case, what is the 'exclusivity period'?

Accepted Answer

The window during which only the debtor may file a plan of reorganization

Answer

The time creditors have to submit competing plans before the debtor files

Answer

The period during which the automatic stay is absolute with no exceptions

Answer

The deadline for the debtor to assume or reject executory contracts

Question 4

Which of the following best describes a 'prepackaged bankruptcy' (prepack)?

Accepted Answer

A Chapter 11 filing where the reorganization plan is already voted on and approved by creditors before the petition is filed

Answer

A Chapter 7 liquidation plan prepared before filing

Answer

A court-supervised auction conducted prior to the bankruptcy petition

Answer

An out-of-court workout completed without any court involvement

Question 5

Under the Bankruptcy Code, what is a 'preference payment'?

Accepted Answer

A payment made to a creditor within 90 days before bankruptcy that gives that creditor more than it would have received in liquidation

Answer

A payment authorized by the bankruptcy court to a key vendor

Answer

An administrative expense paid during Chapter 11 operations

Answer

A dividend declared by the debtor's board prior to filing

Question 6

Which professional is appointed in a Chapter 11 case to represent the interests of unsecured creditors?

Accepted Answer

The Official Committee of Unsecured Creditors (UCC)

Answer

The Debtor-in-Possession (DIP) lender

Answer

The U.S. Trustee only

Answer

The Examiner appointed by the court