Preview Questions Liquidation Lawyer | Role Specific Skill

Question 1: How should a Liquidation Lawyer handle a creditor's claim for a debt that is disputed by the debtor?

Which action should you take?

Choose only one option

Prioritize other claims and disregard the disputed claim

Disallow the claim outright unless the debtor has proof of payment

Investigate the debtor's objections and assess the validity of the claim before making a decision

Accept the creditor's claim without addressing the debtor's objections

Question 2: How are claims prioritized in an insolvency proceeding?

Which action should you take?

Choose only one option

Secured creditors are paid first, followed by unsecured creditors and then shareholders

Claims are distributed equally among all creditors

Unsecured creditors are paid first, then secured creditors, followed by shareholders

Shareholders are paid first, then secured creditors, followed by unsecured creditors

Question 3: What is the role of creditors during the insolvency process?

Which action should you take?

Choose only one option

Creditors receive payments directly from the insolvent company's assets

Creditors are responsible for managing the day-to-day operations of the company

Creditors only submit their claims and do not participate in any decisions

Creditors vote on the appointment of insolvency practitioners and participate in meetings to decide the course of action

Question 4: What is the primary purpose of corporate liquidation?

Which action should you take?

Choose only one option

To sell off assets and continue operations under new management

To restructure the company and avoid bankruptcy

To reduce the company's liabilities without liquidating assets

To wind down the company's operations and distribute its assets to creditors

Question 5: How does the priority of claims change when dealing with a "deed of company arrangement" (DOCA)?

Which action should you take?

Choose only one option

A DOCA does not affect the priority of claims under normal insolvency rules

A DOCA suspends the liquidation process entirely

A DOCA allows creditors to negotiate and vary the payment terms of their claims

A DOCA forces all creditors to accept partial payments based on the company's assets

Question 6: How should a Liquidation Lawyer assess the value of specialized equipment or machinery during liquidation?

Which action should you take?

Choose only one option

Assume that specialized equipment has no value unless it can be sold immediately

Use the book value of the equipment without accounting for condition

Hire an expert to appraise the equipment based on its condition, age, and potential resale value

Use the original purchase price of the equipment without any depreciation