Prior to filing a voluntary Chapter 7 bankruptcy petition, Haynes Company pays a supplier $13,000 to satisfy an unsecured claim. Haynes was insolvent at the time. Subsequently, the trustee appointed to oversee this liquidation forces the return of the $13,000 by the supplier. Which of the following is true?
A. A preference transfer has been voided.
B. All transactions just prior to a voluntary bankruptcy proceeding must be nullified.
C. The supplier should sue for the return of this money.
D. The $13,000 claim becomes a liability with priority.
Ans: A. A preference transfer has been voided.
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If Joe Doe invests $40,000 in franchise and is able to generate $20,000 a year in benefits for 8
years, the following holds true: A) The 20,000 received in year 8 is worth more than the 20,000 received in year 4. B) The 20,000 received in year 2 is worth more than the 20,000 received in year 5. C) The 20,000 received in year 1 is worth less than the 20,000 received in year 3. D) None of the above.