Practice Quiz

Paralegal Exam Prep

Category - Legal Envrmt

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In a Chapter 11 case where the debtor is left in place to operate the business during the reorganization proceeding, the debtor is called a:
  1. Debtor-in-continuation
  2. Debtor-in-possession
  3. Debtor-in-retention
  4. Debtor-in-adjudication
  5. Debtor-in-repossession
Explanation
Answer: B. In a Chapter 11 case where the debtor is left in place to operate the business during the reorganization proceeding, debtor is called a debtor-in-possession. When a debtor files for Chapter 11, the debtor automatically becomes a debtor-in-possession. Chapter 11 rules dictate the rights and obligations of a debtor-in-possession.
Category: Legal Environment
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