A Company filed a voluntary bankruptcy petition, and the statement of affairs reflected the following amounts: Assets Estimated book value Current value Assets pledged with fully secured creditors P 800,000 P1,000,000 Assets pledged with partially secured creditors 500,000 400,000 Free assets 1,300,000 1,200,000 Liabilities are as follows: Liabilities with priority - P200,000 Fully secured creditors - 700,000 Partially secured creditors - 500,000 Unsecured creditors without priority - 1,500,000 Assume that assets are converted to cash at their current values, what is the expected dividend rate (in decimal form) for general unsecured creditors?

A Company filed a voluntary bankruptcy petition, and the statement of affairs reflected the following amounts: Assets Estimated book value Current value Assets pledged with fully secured creditors P 800,000 P1,000,000 Assets pledged with partially secured creditors 500,000 400,000 Free assets 1,300,000 1,200,000 Liabilities are as follows: Liabilities with priority - P200,000 Fully secured creditors - 700,000 Partially secured creditors - 500,000 Unsecured creditors without priority - 1,500,000 Assume that assets are converted to cash at their current values, what is the expected dividend rate (in decimal form) for general unsecured creditors?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 6P

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Kent Co. filed a voluntary bankruptcy petition on August 15, 2008, and the statement of affairs reflects the following amounts: Assets Book value Estimated Market value Pledged with fully secured creditors P300,000 P370,000 Pledged with partially secured creditors 180,000 120,000 Free Assets 420,000 320,000 Liabilities With priority 70,000 Fully secured 260,000 Partially secured 200,000 Unsecured 540,000 What amount of cash will be available for unsecured creditors?
The Sunshine Company has the following data in connection with its bankruptcy petition with the Securities and Exchange Commission at the end of 2018. Unsecured creditorsP287.500. Liabilities with priority137,500 Secured Liabilities Debt 1, P262,500; value of pledged asset 225,000 Debt 2, P212,500, value of pledged asset 125,000 Debt 3, P150,000, value of pledged asset 175,000' The company also has a number of other assets that are not pledge in any way, The creditors holding Debt 2 want to receive at least P177,50 Required: For how much do these free assets have to be sold so that Debt 2 would receive exactly P177,500. Show your solution
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Assets	Estimated book value	Current value
Assets pledged with fully secured creditors	P 800,000	P1,000,000
Assets pledged with partially secured creditors	500,000	400,000
Free assets	1,300,000	1,200,000