Bankruptcy

Bankruptcy An involuntary bankruptcy case is initiated when one or more creditors file a petition and a summons with the clerk of the U.S. Bankruptcy Court. The debtor has 20 days to file objections. If that happens, the case can go to trial to determine if the filing was appropriate. If the debtor does not object, the bankruptcy proceeds in the same fashion as a voluntary case. An involuntary bankruptcy can provide relief in a …

…the allowed amount of claim or of (b) no class below it receives anything in the plan. Due to the fact that the debtor decided that the unsecured creditor was to receive 50% of their claims, the cram down method does not apply. Therefore, the bankruptcy court cannot confirm the debtor's plan of reorganization with respects to this scenario. References: Cheeseman, Henry (2005) Contemporary Business & E-Commerce Law 4th Ed Prentice Hall Upper Saddle River NJ