Discussion Assignment Unit 1 Fin Management

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Nov 24, 2024

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Discussion Assignment Unit 1 Financial Management Task In the discussion forum, you are expected to participate often and engage in deep levels of discourse. Please post your initial response as early as possible and continue to participate throughout the unit. You are required to post an initial response to the question/issue presented in the Forum and then respond to at least 3 of your classmates’ initial posts. You should also respond to anyone who has responded to you. Your Discussion should be a minimum of 250 words in length and not more than 450 words. Please include a word count. Following the APA standard, use references and in- text citations for the textbook and any other sources. For this discussion use your resources in the Reading Assignments and your own to research the bankruptcy process, capital structure, and legal structure and find a firm that has gone bankrupt recently. Explain how these structures can impact a firm’s progress through the bankruptcy process. Be specific to the firm you researched. Response There are several reasons that leads to Bankruptcy. The term bankruptcy is said to be a legal proceeding introduced once an individual or corporate is incompetent to reimburse exceptional Arrears or commitments. The bankruptcy process begins with an appeal sorted by the borrower, or on behalf of creditor similarly, the bankruptcy process is simply occurs w hen firms are unable pay their debts, they may have very limited options for their future. The bankruptcy process is a legal proceeding where a debtor requests to dismiss its commitments when it is incapable to compensate them off. Further, the bankruptcy process undergoes various stages, which includes (Groppelli, A. A., & Nikbakht, E. (2021).  Filing of the petition  Automatic stay  Creditor meetings  Plan confirmation and  Discharge.

On the other hand, Capital Structure of a firm refers to the combination of liability and fairness funding that is utilized by the firm to invest its campaigns. Moreover, the legitimate formation of a firm implies the nature of the corporation entity, such as a sole proprietary, alliance, or establishment. Based on the readings this week, it can be said that both capital and legal structure has a substantial influence on an organization's development during the bankruptcy process. An example of a firm that has gone bankrupt recently was Signature Bank. The institution was shut down on March 12, 2023 , after depositors retreated large sums of money on the reinforces of the downfall of Silicon Valley Bank (SVB). Managers feared continued infection in the banking sector and closed Signature Bank to inhibit the panic. Further the Signature Bank was shut down by federal regulators and the bank’s failure resulted from regulator concern about depositors withdrawing large amounts of money after the failure of Silicon Valley Bank (SVB) and the fear of continued contagion. (Shinn, L. (2023, May 1). As read in the article, (Shinn, L. (2023, May 1), Federal regulators informed that Signature Bank customers would get all deposits back, even amounts over $250,000 that are uninsured by the Federal Deposit Insurance Corp. (FDIC). The bankruptcy process was rough, thus a report from the FDIC in April 2023, of which the FDIC blamed the institution’s failure on bad management, an absence of commercial authority, and failure to attend to and respond quickly to the FDIC's recommendations. (Hunton Andrews Kurth LLP. (n.d.). Also, Signature Bank’s catastrophe presented numerous policy questions and concerns around FDIC insurance, and bank and cryptocurrency oversight. The failure of Silicon Valley Bank directed to a Signature bank run on Friday, March 10, 2023 Where Depositors may have seem to pannick upon receipt of the news of the Silicon Valley Bank failure since Signature had elevated quantities of uninsured credits and was unprotected to the crypto sector.( Shinn, L. (2023, May 1). In conclusion, the capital and legal structure of a firm can have a significant impact on its progress through the bankruptcy process. Moreover, capital structure can create quiet a complex process to generate sufficient cash flow to meet its debt obligations for firms. The bankruptcy process can be a complex and challenging process for firms, but with careful planning and execution, firms can emerge from bankruptcy and continue to operate successfully. Word count: 510 References:

Groppelli, A. A., & Nikbakht, E. (2021). Finance. OpenStax. https://openstax.org/books/finance/pages/1-introduction-to-finance Reuters. (2021, March 1). Hertz Global Holdings Inc. - Company Profile and News. Reuters. https://www.reuters.com/companies/HTZ.N . Hunton Andrews Kurth LLP. (n.d.). Signature Bank: What to know about March 12, 2023 closing, FDIC receivership and Bridge Bank. https://www.huntonak.com/en/insights/signature-bank-what-to-know-about-march-12-2023- closing-fdic-receivership-and-bridge-bank.html#:~:text=Signature%20Bank%2C%20New %20York%2C%20NY%20%28%E2%80%9CSignature%E2%80%9D%29%20was %20closed,began%20last%20week%20and%20continued%20this%20past%u20weekend . Shinn, L. (2023, May 1). What happened to Signature Bank? Investopedia. https://www.investopedia.com/what-happened-to-signature-bank-7370710#:~:text=Signature %20Bank%20was%20shut%20down%20on%20March%2012%2C,to%20contain%20the %20panic.%20Bank%20failures%20aren%E2%80%99t%20new .

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