Fast Feet is a manufacturer of running shoes. Its shoes are not selling fast enough for the company to pay its debts and continue its operations. Fast Feet is now insolvent. What options are available to Fast Feet? How would these options affect Fast Feet's obligations to its creditors, if at all?
What will be an ideal response?
Fast Feet may simply go out of existence. The company would not pay its debts and would simply cease to do business. This option does not get rid of the debt obligations, and Fast Feet's creditors may still pursue a collection action in an attempt to recover whatever assets remain. Another option is a workout. Fast Feet would approach its creditors in an attempt to settle its debts for less than the amount owed in exchange for release of legal liability. A final option for Fast Feet is bankruptcy. The company may choose either a Chapter 7 liquidation, which would result in the selling off of all of its assets, or a Chapter 11 reorganization, which would create a strategy and financial plan to pay off the debt while continuing to do business.
You might also like to view...
Answer the following statements true (T) or false (F)
1. One advantage of decentralized organizations is that procedures are uniform and thus easier to control. 2. The functional structure is the most typical type for small firms. 3. An organization with different groupings of people based on its products, customers, or geographic regions has a functional structure. 4. Ford Motor Co. has what is known as a divisional structure because it has different divisions for passenger car dealers, large trucking customers, and farm products customers.
Which of the following is appropriate etiquette when listening?
a. Restate in your own words what you think the speaker has said. b. Interrupt the speaker when a misstatement is made. c. Frequently break eye contact with the speaker. d. None of the above are appropriate listening etiquette.
The entrepreneur is required to withhold federal and state taxes for employees and then deposit payments monthly or quarterly.
Answer the following statement true (T) or false (F)
Cassie files a voluntary petition in bankruptcy for relief through a liquidation. Among her debts that will not be discharged are included claims? A) by creditors who were not notified of the bankruptcy
B) for money to be paid for goods not delivered. C) for contributions to employee benefit plans. D) for long overdue credit-card debt.