Acts Of Bankruptcy

Bankruptcy includes a range of court procedures in the US that may result in the firm being liquidated or financially reorganized to continue operations. This may occur voluntarily if the firm permits a petition for bankruptcy, or a creditorís petition may force the firm into the courts. Such a petition by a creditor charges the firm with committing one of the following acts of bankruptcy: (1) committing fraud while legally insolvent, (2) making preferential disposition of firm assets while legally insolvent, (3) assigning assets to a third party for voluntary liquidation while insolvent, (4) failing to remove a lien on the firm within 30 days while insolvent, (5) appointment of a receiver or trustee while insolvent, or (6) written admission of insolvency.