If a company files for bankruptcy, there is a strong likelihood that its creditors will not be paid in full. Upon such a filing, the “best interests of creditors” test is performed. The best interests test determines whether a sale of all of the company’s assets should be pursued, with the proceeds paying off creditors in their respective priorities. If a liquidation is expected to generate less value than a restructuring of the business’s balance sheet, then the company is [...]
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