Answered: Define automatic stay (in bankruptcy)

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Finance

Define automatic stay (in bankruptcy)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 18QTD

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Define automatic stay (in bankruptcy)

Expert Solution

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The bankruptcy is a legal proceeding on the individuals and the companies that are not able to pay the debts. It is imposed by the order of the court and the petition is generally filed by the organizations and people who are bankrupt to get relief from the court. In bankruptcy, assets related to the organizations and people are valued and the debts are repaid in the proportion of total assets revalued.

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