Ontario Barrister and Solicitor Practice Exam

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Study for the Ontario Barrister and Solicitor Exam. Quiz with flashcards and multiple choice questions, each with hints and explanations. Prepare for your legal career!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What bankruptcy options are available for a company unable to meet its debt obligations?

Bankruptcy, proposal, or receivership.
Liquidation or consolidation.
Restructuring or refinancing.
Sell-off or closure.

The correct answer is: Bankruptcy, proposal, or receivership.

There are various types of bankruptcy, but the most common for companies are Chapter 7 and Chapter 11 bankruptcies. Chapter 7, also known as liquidation bankruptcy, involves selling off a company's assets to pay off debts. Chapter 11, on the other hand, allows the company to restructure its debts and continue operations. It is considered a form of proposal and often involves a receivership, where a trustee is appointed to supervise the company's financial affairs. B, C, and D are not typical bankruptcy options and do not accurately reflect the options available to a company unable to meet its debt obligations. Liquidation, consolidation, restructuring, refinancing, sell-off, and closure may all be part of the bankruptcy process, but they are not stand-alone options. Therefore, A is the correct answer.