Martin had a successful small business before a recession hit his community. Martin believes the economy will improve in the next year and he may be able to regain a sig-nificant portion of the revenue he lost during the past few years. Martin’s business owes a substantial amount of money on a commercial loan to Quick Repo Bank. He also is three months behind on his home mortgage. Finally, he has been paying for most of his groceries and other personal expenses by using a credit card. Martin knows he will have to file bankruptcy in the next two months. What type of bankruptcy proceeding should Martin file and why? Roselyn Motor Corporation has filed a Chapter 11 bankruptcy. The day before it filed their bankruptcy petition, Roselyn made the following payments: (1) $134,000 in employee salaries, (2) $40,000 to Roselyn’s main supplier Auto Parts Supplier, and (3) $1,200 for a utility bill. Roselyn also transferred ownership of a plant to its main customer for a fraction of the plant’s fair market value. In addition, Roselyn returned merchandise to its second most important supplier because Roselyn had not yet paid for said merchandise. Which payments and transfers may a trustee set aside in the Chapter 11 proceeding?
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Martin had a successful small business before a recession hit his community. Martin believes the economy will improve in the next year and he may be able to regain a sig-nificant portion of the revenue he lost during the past few years. Martin’s business owes a substantial amount of money on a commercial loan to Quick Repo Bank. He also is three months behind on his home mortgage. Finally, he has been paying for most of his groceries and other personal expenses by using a credit card. Martin knows he will have to file bankruptcy in the next two months. What type of bankruptcy proceeding should Martin file and why?
Roselyn Motor Corporation has filed a Chapter 11 bankruptcy. The day before it filed their bankruptcy petition, Roselyn made the following payments: (1) $134,000 in employee salaries, (2) $40,000 to Roselyn’s main supplier Auto Parts Supplier, and (3) $1,200 for a utility bill. Roselyn also transferred ownership of a plant to its main customer for a fraction of the plant’s fair market value. In addition, Roselyn returned merchandise to its second most important supplier because Roselyn had not yet paid for said merchandise. Which payments and transfers may a trustee set aside in the Chapter 11 proceeding?
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