Uptown Cleaners is being liquidated. The building has been sold for a net of $670,000 but the mortgage due is $738,000. The remaining assets were sold with net proceeds of $154,000. Administrative costs, wages and benefits, and consumer claims equal $136,000. The firm also owes $58,000 in taxes. The secured claims total $46,000 and the unsecured claims are $138,000. What percentage of their total claims will the secured creditors be paid?
A) 11.2 percent
B) 8.8 percent
C) 0 percent
D) 41.2 percent
E) 39.1 percent
C) 0 percent
Explanation: Funds available after expenses, wages, claims, and taxes = MAX[$154,000 ? 136,000 ? 58,000,0]
Funds available after expenses, wages, claims, and taxes = $0
There are no funds available for either the secured or unsecured creditors.
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