One of my customers filed for bankruptcy protection listing almost $3 million
in assets, and less than $2 million in liabilities. How can they be bankrupt?
Answer: There are two
tests, and failing one or both can lead to a bankruptcy filing. The first
test is a company's liabilities exceed its assets. The second test is
that the company is unable to pay its bills as they come due. Since your
customer passed the first test, it must be claiming to have failed the
second - qualifying it for Chapter 11 protection. |