Which one of the following statements is correct?
A)All Chapter 7 bankruptcy filings must include a "workout" agreement.
B)Firms must remain in bankruptcy for at least 18 months.
C)Key employee retention plans (KERPs) are no longer legal.
D)Labor contracts cannot be modified through the bankruptcy process.
E)A firm can file for Chapter 11 bankruptcy even if the firm is solvent.

Question

Quizplus · Accepted Answer

A firm can file for Chapter 11 bankruptcy even if the firm is solvent. This is often done to restructure the company's debts and operations in a more manageable way. The other statements are incorrect - not all Chapter 7 filings need a workout agreement, firms can exit bankruptcy sooner than 18 months, KERPs are still legal in some situations, and labor contracts can be modified through the bankruptcy process.

Which One of the Following Statements Is Correct