Preview Questions Liquidation Lawyer | Role Specific Skill

Question 1: How does a Liquidation Lawyer ensure an accurate valuation of inventory in liquidation?

Which action should you take?

Choose only one option

By assuming the inventory is worth the same amount as it was originally purchased

By relying solely on the company's internal inventory records

By conducting a physical inventory check and assessing current market conditions

By estimating the market price based on the company's projected sales

Question 2: What factors must be considered when valuing real estate assets during liquidation?

Which action should you take?

Choose only one option

The historical cost of the property and its original purchase price

Market conditions, location, the condition of the property, and any legal encumbrances

The potential future income the property could generate

The original valuation by the debtor

Question 3: In a compulsory liquidation, what is the legal test for determining whether the company is insolvent?

Which action should you take?

Choose only one option

The company is deemed insolvent if it cannot pay its debts as they fall due

The company is considered insolvent if it has less than 20% assets relative to its liabilities

Insolvency is determined if the company fails to provide adequate documentation

The company is insolvent if it is unable to meet its obligations under the balance sheet test

Question 4: What is a creditors' committee, and how does it function during a liquidation?

Which action should you take?

Choose only one option

A legal team hired by the debtor to negotiate creditor settlements

A committee of creditors appointed to oversee the liquidation process and represent their interests

A government body that monitors the liquidation proceedings

A group of employees formed to ensure their claims are addressed in the liquidation

Question 5: How should a Liquidation Lawyer handle creditors' objections to the proposed liquidation plan?

Which action should you take?

Choose only one option

Ignore the objections and proceed with the plan regardless

Negotiate with the creditors to resolve their concerns or modify the plan as necessary

Cancel the entire liquidation process and attempt a new restructuring plan

Revert to the debtor's original plan without consideration of creditor objections

Question 6: How does fraudulent conveyance affect the treatment of creditor claims in a liquidation?

Which action should you take?

Choose only one option

Fraudulent conveyances are automatically disallowed in the liquidation process

Creditors holding fraudulent conveyance claims must file separately in criminal court

Claims involving fraudulent conveyances can be reversed, and assets returned to the estate

Fraudulent conveyances are ignored as long as the debtor repays a portion of the claim