Asked by Austin Parker on Jul 26, 2024
Verified
Which of the following is a duty vested in a trustee by the court,when the debtor is a business and files a Chapter 7 petition?
A) He may be authorized to operate the business for a limited period of time.
B) He may be authorized to make payments made by the debtor within 90 days before the filing of the petition.
C) He may be authorized to sell the debtor's properties and hand over the proceeds of the sales to the debtor.
D) He may be authorized to pay off the debts according to the personal priority list.
Chapter 7 Petition
A legal request filed in a bankruptcy court for relief under Chapter 7 of the United States Bankruptcy Code, resulting in liquidation of a debtor's assets.
Trustee
An individual or organization appointed to manage and administer property or assets on behalf of others, often in the context of a trust or bankruptcy.
Debtor
An individual or entity that owes money to another entity or individual.
- Describe the trustee's duties and powers in bankruptcy proceedings.
Verified Answer
DC
Desire CorcinoJul 27, 2024
Final Answer :
A
Explanation :
When a business files for Chapter 7 bankruptcy, the court may appoint a trustee to oversee the liquidation of assets and distribution of proceeds to creditors. One possible duty of the trustee in this situation is to operate the business for a limited period of time, in order to maximize the value of assets that will be sold to pay off debts. This is often done to allow the business to continue operating while a buyer is sought, or to give creditors time to assess the value of the company's assets. The other options listed (B, C, and D) are not typically duties of a Chapter 7 trustee in the context of a business bankruptcy filing.
Learning Objectives
- Describe the trustee's duties and powers in bankruptcy proceedings.