Purpose
The purpose of this power point project is to research and analyze debt management, bankruptcy options and consequences bankruptcy for businesses.
This project requires you to identify and assess legal issues, apply law to facts and make recommendations.
Course outcome met by this project:
analyze and apply principles of secured transactions, creditor-debtor rights, and bankruptcy in the business environment
Background:
After five years of operations, the economy began to slow due to inflation and rising interest rates. The result was rising prices in consumer goods and a marked reduction in discretionary spending. In addition, consumer credit was affected by late payments and defaults.
This had a three-pronged negative effect on PI. First, there was a significant reduction in new contracts for paint jobs. Second, the price of paint took a steep jump, and finally, many customers to whom credit was extended for paint jobs began falling behind on payments and in some cases defaulted on their credit agreements.
This has severely hurt PI’s financial condition and the company experienced a loss during the first quarter of the current year and the forecast for the next quarter does not show any improvement. As a result, the three owners have asked their accountants for a complete audit of the company’s books.
After meeting with their accountants, Jo, Maddy and Taylor have asked BCA for advice about the options that are available to mitigate their losses, including whether to file for bankruptcy or explore other remedies.
Pat and Gale have been asked to research possible options available to PI and prepare a Power Point presentation for PI regarding your findings.