In creating a Bankruptcy Plan simulation the user encounters several bankruptcy situations in which the user must decide which chapter of the Bankruptcy Code to file and implement the appropriate bankruptcy plans. The simulation begins with Cardew Printing, a small limited liability printing business, which has been running at a loss for several years. Cardew Printing is unable to make the agreed upon payments to its creditors and is faced with deciding between chapter 7 and chapter 11 bankruptcy. In 2005, the current year of this simulation, the number of business filings for Chapter 7 was 28,006 and Chapter 11 was 5,923. This is approximately a 5 to 1 ratio of Chapter 7 bankruptcy filings to Chapter 11 bankruptcy filings (U.S. Bankruptcy Courts, 2006).
I choose Chapter 11 for Cardew after looking at key indicators, assets/liabilities, industry, and projected cash flow. Cardew’s high net receivables covered 30% of its liabilities and the recent purchase of new high tech printing......
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Approximate Word Count: 732
Approximate Pages: 3 (260 words per double-spaced page) |