The term 'Act of Bankruptcy' refers to actions or behavior indicating that a person or entity might be judged as bankrupt. Such behavior often includes transferring property titles to others with the intent to delay or defraud creditors and admitting bankruptcy.
An order made by a court for the administration of the estate of a judgment debtor or a company in financial distress, focused on debt repayment and business survival.
A term used to describe the state of a business that has failed, where all of its assets and properties are liquidated because there is no more work or business activities to conduct.
Annulment in accounting refers to the cancellation by a court of a bankruptcy order, under certain conditions such as wrongful bankruptcy declaration, full repayment of debts, or court-approved voluntary arrangement.
The automatic stay is a provision in U.S. bankruptcy law that halts all collection activities, including litigation, repossessions, and foreclosures, immediately upon filing a bankruptcy petition.
Bankruptcy is the state of an individual or entity unable to pay off their debts. A court-ordered bankruptcy order leads to the liquidation of the bankrupt's assets to repay creditors.
Informal slang term meaning bankrupt, derived from the posture of a dead fish lying with its belly facing up.
An investor who seeks to purchase securities, commodities, or other assets that are at their lowest market prices and are expected to rise in value.
In bankruptcy, a cram down refers to the reduction of various classes of debt to a lower amount. It allows a bankruptcy reorganization plan to be confirmed even if some creditor classes vote against it, provided the plan is fair and equitable and does not unfairly discriminate against any dissenting class.
Credit Scoring is an objective methodology used by credit grantors to determine how much credit to grant to an applicant. Various factors like income, assets, employment history, residence stability, and past credit behavior are considered.
Debt administration refers to the process of managing and overseeing the repayment of debts, ensuring that they are correctly and timely settled in compliance with agreed terms and conditions.
A debtor is an individual or entity that owes money to another party, typically referred to as a creditor. In bankruptcy or similar legal proceedings, a debtor is the subject on whom the actions are primarily focused.
Discharge in bankruptcy refers to the release of a bankrupt debtor from most liabilities pursuant to a confirmed plan of reorganization. Some debts are not subject to discharge.
Discharge in bankruptcy refers to the formal release of a debtor from the legal obligation to pay off all or a portion of their debt, typically following bankruptcy proceedings. It removes the debtor's liability for certain debts while providing a fresh financial start.
Distress termination is a type of plan termination that occurs when a company is in severe financial distress, such as bankruptcy, and cannot afford to continue its pension plan.
Distribution refers to various processes including the payment of dividends, the final settlement of a company's assets upon winding up, allocation of a person's property, and the channeling of goods to consumers.
A critical clause in a loan agreement where breaching certain conditions can make the loan immediately repayable. The breaching of any covenant clause, failure to pay, failure to perform other duties and obligations, false representation and warranty, material adverse change, bankruptcy, and alienation of assets all account for events of default.
The Financial Services Compensation Scheme (FSCS) is a protection mechanism, developed under the Financial Services and Markets Act 2000, aimed at safeguarding private investors from financial losses due to the default or bankruptcy of authorized investment firms.
A forced sale is an urgent sale of assets, typically conducted under significant pressure or compulsion, where the seller has limited opportunity to obtain a fair market value. Examples include sales conducted through foreclosure, bankruptcy, or instances of duress.
A G-Type Reorganization involves the transfer of assets by a corporation in bankruptcy to another corporation, where stocks or securities of the transferee corporation are distributed to shareholders either tax-free or partially tax-free.
Inability to pay one's debts when they fall due, which may lead to bankruptcy for individuals or liquidation for companies.
A legal mechanism through which the estate of a deceased debtor is administratively handled in cases of insolvency, often drawing from principles of bankruptcy law.
The Insolvency Service is an executive agency under the Department for Business, Innovation and Skills tasked with investigating and managing bankruptcies and liquidations.
Involuntary bankruptcy occurs when creditors force a debtor into bankruptcy proceedings, typically under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.
The Lehman Brothers scandal emerged after the collapse of Lehman Brothers in late 2008. It involved using a loophole in US accounting standards known as 'Repo 105' to hide substantial losses on the subprime mortgage market.
To settle or determine the amount due and extinguish indebtedness. More commonly, liquidate refers to the adjustment or settlement of debts and sometimes paying off obligations.
Negative working capital occurs when a company's current liabilities exceed its current assets, raising concerns about its ability to meet short-term obligations and threatening its operational viability.
An Official Receiver (OR) is a person appointed by the Secretary of State for Business, Innovation and Skills to act as a receiver in bankruptcy and winding-up cases. Official receivers are officers of the court, usually acting as liquidators in company windups.
An Official Receiver (OR) is an officer of the court, appointed to manage the estates of insolvent companies or bankrupt individuals. They are responsible for administering the insolvency processes, including the realization and distribution of assets.
Preference occurs when an insolvent debtor favours a particular creditor, such as by paying one creditor in full, to the disadvantage of other creditors. If the debtor becomes bankrupt or goes into insolvent liquidation, the court can order restoration to ensure equitable treatment among all creditors.
A creditor whose debt is prioritized over other creditors’ debt, increasing their likelihood of payment in full during a bankruptcy or company winding-up procedure.
An obligation that is prioritized for repayment over other debts.
Prepackaged bankruptcy under Chapter 11 involves a pre-negotiated agreement between creditors and the debtor regarding the terms of reorganization before filing for bankruptcy.
A multifaceted concept predominately characterized by the sequence of preference in various legal and financial settings including bankruptcy proceedings, and the right to be paid before other creditors.
The term 'ratable' refers to something that can be estimated or assessed proportionally, often in the context of taxation, bankruptcy, or legal financial obligations.
Recapitalization involves altering the mix of debt and equity financing in a company without changing the total amount of capital.
A receiver is an individual appointed to manage the property, assets, or business operations of an entity during bankruptcy or other legal proceedings. The specific powers and duties of a receiver can vary based on the type of receivership.
Receivership is a process where an appointed receiver manages a company's assets to repay debt owed to a lender due to the company's default or insolvency.
Recontracting is the renegotiation of contracts between a company in financial distress and its creditors to establish more favorable terms.
Refers to words written on a cheque that is being dishonoured by a bank, typically due to insufficient funds or other specific issues such as bankruptcy or technical errors.
Reorganization refers to the financial and structural overhaul of a company to restore profitability and operational efficiency. It commonly occurs in both legal and managerial contexts and can involve financial restructuring, changes in lines of authority, and adjustments to organization charts.
The concept of ring-fencing is used in finance and corporate restructuring to isolate a certain portion of assets, liabilities, or operations to protect the rest of the company or to dedicate specific funds for particular purposes.
A Scheme of Arrangement is an agreement between a company and its members or creditors to restructure the business or debts, often used during financial difficulties or takeovers and requires court sanction.
Loans or debt securities that have priority claim over junior obligations and equity on a corporation's assets in the event of liquidation.
A comprehensive document that outlines a debtor's assets, liabilities, and creditor details in the context of bankruptcy proceedings, essential for assessing financial status during insolvency.
Termination of a plan refers to the cessation of a pension plan, done either through a standard termination or a distress termination method. Each approach has specific legal and financial implications.
A trustee in bankruptcy is an individual or entity appointed to manage the property and financial affairs of a bankrupt individual or entity. The trustee's responsibilities include collecting and liquidating assets, distributing the proceeds to creditors, and ensuring that the bankruptcy process is conducted in accordance with applicable laws.
A person whose bankruptcy has not been discharged, limiting their ability to obtain credit and conduct business without specific disclosures, and restricting them from holding certain public offices.
The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States. It is designed to provide consistency and predictability in the regulation of business activities across all states.
An unsecured creditor is an entity to whom money is owed by an organization but does not have any specific collateral or asset to lay claim on in the event of bankruptcy or non-payment.
Winding-up is the process of dissolving a company by liquidating its assets to pay off creditors and distributing any remaining assets to shareholders.
A mutual effort by a property owner and lender to avoid foreclosure or bankruptcy following a default. It generally involves a substantial reduction in the debt service burden during an economic downturn.
An in-depth exploration of the WorldCom scandal, one of the largest accounting fraud cases in history, which involved significant financial manipulations leading to inflated profits and assets.
A zombie company is a business that continues to operate despite being insolvent or bankrupt, often propped up by banks or investors even though it does not generate sufficient revenue to service its debts.
