Summary: Final Exam

Read the summary and the most important questions on Final Exam

• 1 vocab

  This is a preview. There are 197 more flashcards available for chapter 1
  Show more cards here

• Purchase-money security interest (PMSI):

  a security interest that arises when a seller or lender extends credit for part or all of the purchase price of goods purchased by a buyer

• Artisan’s lien: 

  a possessory lien on personal property of another person to ensure payment to a person who has made improvements on and added value to the property

• Creditors’ composition agreement

   An agreement formed between a debtor and his or her creditors in which the creditors agree to accept a lesser sum than that owed by the debtor in full satisfaction of the debt

• Debtor in possession (DIP): 

  Bankruptcy proceedings, a debtor who is allowed to continue in possession of the estate in property (the business) and to continue business operations

• Mechanic’s lien: 

  a statuary lien on the real property of another to ensure payment to a person who has performed work and furnished materials for the repair or i9mporvement of that property

• U, S, trustee: 

  A government official who performs certain administrative tasks that a bankruptcy judge would otherwise have to perform 

• Joint stock Company: 

  a hybrid form of business organization that combines characteristics of a corporation and a partnership. Usually, a joint stock company is regarded as a partnership for tax and legal purposes

• Private equity capital: 

  funds invested by a private equity firm in an existing corporation, usually to purchase and recognize it. 

• Short-form (parent-subsidiary) merger: 

  a merger than can be accomplished without the approval of the shareholders of either corporation because one company (the parent corporation) owns at least 90 percent of the outstanding shares of each class of stock at the other corporation (the subsidiary corporation).

• Business judgement rule: 

  a rule that immunizes corporate directors and officers from liability for decisions that result in corporate losses or damages as long as the decisions that result in corporate losses or damages as long as the decision makers tool reasonable steps to become informed, had a rational basis for the decisions, and did not have a conflict of interest with the corporation