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Glossary of Terms

341 Meeting – First Meeting of Creditors



Adequate Protection – The right of a party with an interest in the
debtor’s property (such as a secured creditor) to assurance that
its interest will not be diminished during the bankruptcy proceedings.

Administrative Claim (or Administrative Expense Claim) – Debt incurred
by the debtor, with court approval, after the bankruptcy filing, includes
the necessary costs of preserving the estate, wages, salaries, court costs,
lawyers’ fees, accountants’ fees, trustees’ expenses, etc.

Adversary Proceeding – A lawsuit filed in the bankruptcy court which
is related to the debtor’s bankruptcy case. Examples are: complaints
by a creditor to determine the dischargeability of a debt, and complaints
to determine the extent and validity of liens.

Allowed Claim (or Allowed Interest) – A claim of a creditor (or an
equity interest) that is approved by the court for satisfaction under
the plan of re-organization.

Arrangement – May refer to a variety of formal or informal agreements
worked out concerning the conditions under which a bankrupt company may
operate; often, it refers to an extent of time in which debt can be paid
off. This was the term used under old Chapter XI.

Arrears – The amount that is unpaid and overdue as of the date the
bankruptcy case is filed. The word “arrears” is often used
when referring to back child support owed, back alimony owed, or the amount
that is past due on mortgage payments (including interest and penalties).

Asset – Personal possessions of value, including cash, real estate,
vehicles and investments.

Automatic Stay – The suspension of actions, such as debt collection
or foreclosure, against the company or consumer in bankruptcy. Occurs
automatically when the bankruptcy petition is filed. This action protects
the debtor from creditors seeking to seize its assets. It also protects
some creditors in that it prevents one creditor from obtaining an excessive
share of the assets of the bankrupt to the exclusion of the other creditors.

Avoidance – The Bankruptcy Code permits the debtor to eliminate (avoid)
some kinds of liens that interfere with (or impair) an exemption claimed
in the bankruptcy. Most judgment liens that have attached to the debtor’s
home can be avoided if the total of the liens (mortgages, judgment liens
and statutory liens) is greater than the value of the property in which
the exemption is claimed. This is sometimes called “lien stripping.”

Avoidance Power – The power of the court to invalidate certain obligations
or transactions undertaken by a debtor prior to filing bankruptcy. It
is generally intended to reverse transfers of property that favor one
creditor over another.



Ballot Date – Concerning a bankruptcy reorganization, the date and
time, set by the bankruptcy court, by which all votes for accepting or
rejecting the plan of reorganization must be received.

Bankrupt – The entity that files a bankruptcy; the debtor; the insolvent
entity. This is a non-technical term and is not used in the Bankruptcy Code.

Bankruptcy – A non-technical term for a legal state of insolvency.

Bankruptcy Act of 1898 – The basis of the federal bankruptcy statutes
used until the Bankruptcy Reform Act of 1978; provided primarily for liquidation
of companies; reorganization could be effected indirectly under the 1898
Act through equity receiverships (these were used to keep creditors from
seizing the assets of distressed companies).

Bankruptcy Act of 1933 – A statutory expansion of reorganization
for companies; (see Section 77); the Bankruptcy Act of 1933 and the Bankruptcy
Act of 1934 were superseded by the Chandler Act of 1938.

Bankruptcy Act of 1934 – A further statutory expansion of reorganization
for companies; (see Section 77B); the Bankruptcy Act of 1933 and the Bankruptcy
Act of 1934 were superseded by the Chandler Act of 1938.

Bankruptcy Code – The name given to the statutory body of bankruptcy
laws after the Bankruptcy Reform Act of 1978 or Title 11 of the United
States Code governs bankruptcy proceedings. Bankruptcy is a matter of
federal law and is, with the exception of exemptions, the same in every
state. When federal bankruptcy law conflicts with state law, federal law controls.

Bankruptcy Court – The federal tribunal where cases under the Bankruptcy
Code are litigated.

Bankruptcy Estate – Generally, the property of the debtor that is
subject to the jurisdiction of the bankruptcy court.

Bankruptcy Petition – The document filed with the court to initiate
a bankruptcy proceeding.

Bankruptcy Rule 2004 – A provision of the Bankruptcy Code that allows
one party in a bankruptcy proceeding to compel discovery or other examination
against another party.

Bar Date – The last date that creditors may file a claim against
the debtor.

Business Bankruptcy – A bankruptcy categorized by the U.S. courts
as a business bankruptcy; data from the U.S. Administrative Office of
the Courts subdivides bankruptcies into business and non-business.

Business Failure – An economic assessment of the viability of a business,
it means that a firm is either not earning what is expected (i.e. it has
a below normal rate of return) or is not meeting its obligations. It is
not synonymous with bankruptcy because bankruptcy is more of a formal
and legal definition. A failing company is not necessarily a bankrupt
company and vice-versa.



Cash Collateral – Cash and cash equivalents held by the debtor in
Chapter 11 subject to liens of other parties.

Chapter 11 – Reorganization proceedings, generally for business entities;
the debtor maintains control of the business in Chapter 11 (unless the
Court appoints a trustee).

Chapter 9 – Bankruptcies of municipalities; only a few of these are
filed each year; over the period 1980 through 1988 there were about 4
Chapter 9 filings per year.

Chapter 7 – Liquidation proceedings; generally assets are sold by
a trustee and the company ceases operation. (Individuals may file Chapter 7 also.)

Chapter 13 – Bankruptcy proceedings for an individual with the intention
of re-scheduling the individual’s debt (rather than liquidating
the individual’s assets and debt; an individual files under Chapter
7 to liquidate); Chapter 13 is referred to as wage-earner bankruptcy,
personal bankruptcy or consumer bankruptcy; Chapter 13 cannot be used
by a partnership or a corporation; it can be used by a sole proprietorship.

“Chapter 33″ – An unofficial term describing a company
that has filed for Chapter 11 three times.

Chapter 12 – Family farmer bankruptcies; created by Congress in 1986
(Chapter 12 became effective on November 26, 1986 and is now a permanent
Chapter of the Bankruptcy Code); Only a family owned farm business can
qualify for Chapter 12 and it must have debt less than $1.5 million and
have 50% of its income from farming operations.

“Chapter 20″ – An unofficial term describing the filing
of a Chapter 7 proceeding followed by a Chapter 13. The Chapter 7 filing
eliminates unsecured debts while the Chapter 13 filing handles continuing liens.

“Chapter 22″ – An unofficial term describing a company
that has filed for Chapter 11 twice.

Claims – Rights to repayment made by creditors against a debtor;
they may be liquidated, unliquidated, fixed, contingent, matured, unmatured,
secured, unsecured, subordinated, legal, or equitable. See specific entries
and priority of claims.

Class – Each of the different categories of claims against a debtor.

Collateral – The property which is subject to a lien. A creditor
with rights in collateral is a secured creditor and has additional protections
in the Bankruptcy Code for the claim secured by collateral. The measure
of the secured claim is the value of the collateral available to secure
the claim: it is possible to have a lien on property that is subject to
a senior lien or liens such that the security available to pay the claim
is really without value to the junior creditor. The general rule with
respect to liens is “First in time, first in right.”

Confirmation – The final approval by the bankruptcy court of a debtor’s
plan of reorganization. Confirmation takes place after the plan has been
approved by creditors.

Contested Matter – A dispute among the parties to a bankruptcy proceeding,
instituted by the filing of a motion of the court.

Convenience Claims – Under a plan of reorganization or liquidation,
claims that are small (e.g. in the hundreds or thousands of dollars range)
and numerous are often grouped into a single class and settled for cash
for administrative convenience.

Conversion – Changing chapters in bankruptcy (e.g., converting from
Chapter 11 to Chapter 7 or vice-versa).

Core Proceedings – Those proceedings that are inherent in and fundamental
to the administration of a bankruptcy case. Core proceedings are subject
to the jurisdiction of the bankruptcy court. Non-core proceedings may
be conducted outside the jurisdiction of the bankruptcy court.

Cramdown – If the loan on a motor vehicle is 910 days old or older,
you may only have to pay what the car is actually worth, not what the
balance of that loan is in a Chapter 13. For example: If you owe $25,000
on your vehicle and its value is only $10,000, you would only pay $10,000
through your Chapter 13 Plan.

Confirmation – Confirmation of a Chapter 13 Plan of reorganization
over the objections of one or more classes of creditors.

Credit Report – A report outlining an individual’s credit history,
public records and credit worthiness.

Creditor – The person or organization to whom the debtor owes money
or has some other form of legal obligation.

Creditor’s Committee – A committee of representatives of a
debtor’s creditors appointed by the U.S. Trustee. The committee
acts on behalf of all creditors on negotiating a plan of reorganization
and other major actions. In large, complex cases, there may be more than
one such committee.



Debtor – The entity seeking protection from creditors under the
bankruptcy laws.

Debtor-in-Possession – The debtor who remains in control of operations;
as opposed to having a trustee operate the company.

Default – The failure by an entity to abide by the covenants in a
debt obligation or other agreement to which it is a party. The most common
default is non-payment of interest or principal.

Delinquency -Failure to make payments when payments are due. For most mortgages,
payments are due on the first day of the month. Even though they may not
charge a “late fee” for a number of days, the payment is still
considered to be late and the loan delinquent. When a loan payment is
more than 30 days late, most lenders report the late payment to one or
more of the credit bureaus.

Denial of Discharge – Penalty for debtor misconduct with respect
to the bankruptcy case or creditors as a whole. The grounds on which the
debtor’s discharge may be denied are found in 11 U.S.C. 727. When
the debtor’s discharge is denied, the debts that could have been
discharged in that case cannot be discharged in any subsequent bankruptcy.
The administration of the case, the liquidation of assets and the recovery
of avoidable transfers continues for the benefit of creditors.

Discharge (of indebtedness) – The satisfaction or elimination of
the debts of the debtor by the bankruptcy court.

Dischargable Debt – Debt that can be eliminated in a bankruptcy.
Certain debt is not dischargeable; that is, it may not be discharged through
bankruptcy, or may only be discharged through Chapter 13. Family support
and criminal restitution are examples of debt which cannot be discharged.

Disclosure Statement – A comprehensive disclosure document sent to
creditors where they are asked to vote on a plan of reorganization in
Chapter 11.

Dismissal – The termination of a bankruptcy proceeding. The bankruptcy
court can dismiss a case if it deems that the debtor should not have filed,
or that a plan can never be confirmed, or not complied with. See also
conversion.

Distressed – Used to describe securities, companies and related items
in or near bankruptcy or insolvency. The term does not have a strict,
technical, or legal definition. For example, a distressed security might
be a security where the issuer has defaulted or a security that is selling
at a substantially discounted price where a default is expected in the future.

Docket – The schedule on which the clerk of the court records all
motions, pleadings, memoranda, orders and all other court filings.



Effective Date – The date on which a plan of reorganization is implemented;
it usually occurs after all the conditions to a plan of reorganization
have been satisfied.

Equitable Subordination – The lowering of priority of a claim because
the holder of the claim is found to be guilty of some kind of improper conduct.

Equity – A homeowner’s financial interest in a property. Equity
is the difference between the value of the property and the amount still
owed on its mortgage and other liens.

Examiner – A professional appointed by the bankruptcy court to investigate
and oversee certain aspects of the debtor or the proceedings. (By way
of comparison, the role of the trustee is to operate the business of the
debtor whereas the role of the examiner is to investigate and report to
the court.)

Exchange Offer – An offer by an issuer of debt securities to exchange
new securities with less onerous provisions for currently outstanding
securities. Companies often make exchange offers in an attempt to avoid
bankruptcy.

Exclusivity (period of) – A debtor in Chapter 11 has the exclusive
right to file a plan of reorganization for the first 120 days of its bankruptcy.
Thereafter, unless the period of exclusivity is extended by the court,
other parties may file reorganization plans.

Executory Contract – A contract in which some or all of the obligations
of each party have not yet been completed. The debtor-in-possession (or
trustee) is allowed to reject unilaterally certain executory contracts.

Exempt – Property that is exempt is removed from the bankruptcy estate
and is not available to pay the claims of creditors. The debtor selects
the property to be exempted from the statutory lists of exemptions available
under the law of his state. The debtor gets to keep exempt property for
use in making a fresh start after bankruptcy.

Exemptions – Exemptions are the lists of the kinds and values of
property that are legally beyond the reach of creditors or the bankruptcy
trustee. What property may be exempted is determined by state and federal
statutes, and varies from state to state.



Failure – An economic assessment of the viability of a business,
it means that a firm is either not earning what is expected (i.e. it has
a below normal rate of return) or is not meeting its obligations. It is
not synonymous with bankruptcy because bankruptcy is more of a formal
and legal definition. A failing company is not necessarily a bankrupt
company and vice-versa.

Fair Market Value -The highest price that a buyer, willing but not compelled
to buy, would pay, and the lowest a seller, willing but not compelled
to sell, would accept. Foreclosure: The legal process by which a borrower
in default under a mortgage is deprived of his or her interest in the
mortgaged property. This usually involves a forced sale of the property
at public auction with the proceeds of the sale being applied to the mortgage debt.

Fee Examiner – Appointed by the court to monitor fees paid to professionals
in bankruptcy cases.

Fiduciary – One who is entrusted with duties on behalf of another.
The law requires the highest level of good faith, loyalty and diligence
of a fiduciary, higher than the common duty of care that we all owe one
another. The debtor in possession in a Chapter 11 is a fiduciary for the
creditors, owing loyalty to the creditors and not to the shareholders
of the debtor.

Filing Fees – (as of January 2007) for Chapter 7 the fee is $299,
for Chapter 11 it is $830 and for Chapter 13 it is $274.

First Meeting of Creditors (341 meeting) – A mandatory meeting between
creditors and the debtor. It is usually held within a month of the filing
of bankruptcy, but often occurs later when the debtor has filed its schedules
of financial information.

Fraudulent Conveyance – The transfer of valuable assets from a company
which: A) occurs when the company is technically insolvent, B) renders
the company insolvent, or C) is made for less than adequate consideration.
The spate of leveraged buyouts and other highly leveraged transactions
in the 1980s has spurred a number of fraudulent conveyance allegations
in recent years.



Gap Period – The period between the filing of an involuntary petition
and the dismissal of the petition, the entry of an order for relief or
the filing of a voluntary petition (whichever is the outcome).

Garnishment – A court ordered method of debt collection in which
25% of a person’s salary is paid to a creditor. The process by which
a judgment creditor seizes money, which is owed to his judgment debtor,
from a third party known as a garnishee.

General, Unsecured Claim – Creditor’s claim, without a priority,
for payment for which the creditor holds no security (or collateral).
If the available funds in the estate extend to payment of unsecured claims,
the claims are paid in proportion to the size of the claim relative to
the total of claims in the class of unsecured claims.

Going Concern Value – What a company is worth if sold as a continuing
business, as opposed to its liquidation value.




Impairment – When a plan of reorganization alters the contractual rights
of a class of holders of claims, that class is deemed to be impaired.
A class that is unimpaired is deemed to automatically accept a plan of
reorganization.

Insolvency – Another term used to describe a firm that is failing;
generally it means that a firm’s liabilities exceed its assets or
that it is unable to satisfy its obligations as they come due.

Interests – The equity interests of stockholders are often referred
to in bankruptcy documents merely as “interests.”

Involuntary Bankruptcy – A bankruptcy initiated by at least three
creditors holding unsecured claims aggregating at least $5000 against
the debtor. Data from the U.S. Administrative Office of the Courts subdivides
bankruptcies into voluntary and involuntary.



Joint Administration – The combining of two or more bankruptcy proceedings
for administrative convenience. Frequently, the cases of affiliated entities
are jointly administered. Joint administration does not necessarily result
in substantive consolidation




Lien – An interest in real or personal property which secures a
debt; the lien may be voluntary, such as a mortgage in real property,
or involuntary, such as a judgment lien or tax lien.

Liquidating Reorganization – An informal term for a Chapter 11 proceeding
when the company is essentially liquidated through one or more asset sales.

Liquidation – The dissolution of a company (or individual); usually
operations cease and assets are sold by auction; Chapter 7 is usually
employed for liquidations, business or personal.

Liquidation Value – The aggregate value of a business if its assets
are sold piecemeal.



Matrix – A mailing list of creditors of the debtor. Done as part
of the forms filled out for a Chapter 11 case.



National Bankruptcy Review Commission – An independent commission
established pursuant to the Bankruptcy Reform Act of 1994 to investigate
and study issues relating to the Bankruptcy Code. The Commission completed
a final report and ceased to exist as of November 19, 1997.

No Asset Case – A debt that cannot be eliminated in bankruptcy. Non
dischargeable debts remain legally enforceable despite the bankruptcy
discharge.

NOL (net operating loss) – Losses, for tax purposes, that can be
carried forward and applied to reduce taxable income in future years.
The Tax Reform Act of 1986 imposed stringent restrictions on the use of
tax loss carry-forwards.

Non-Business Bankruptcy – A bankruptcy categorized by the U.S. courts
as a non-business bankruptcy; the debtor in a non-business bankruptcy
is usually either an individual or a family farm; data from the U.S. Administrative
Office of the Courts subdivides bankruptcies into business and non-business.

Non-Dischargable – A debt that cannot be eliminated in bankruptcy.
Non dischargeable debts remain legally enforceable despite the bankruptcy
discharge.




PACER (Public Access to Court Electronic Records) – A service provided
by the court system that gives case filing information. PACER requires
an IBM-compatible computer equipped with a modem.

Perfection – When a secured creditor has taken the required steps
to perfect his lien, the lien is senior to any liens that arise after
perfection. A mortgage is perfected by recording it with the county recorder;
a lien in personal property is perfected by filing a financing statement
with the secretary of state. An unperfected lien is valid between the
debtor and the secured creditor, but may be behind liens created later
in time, but perfected earlier than the lien in question. An unperfected
lien can be avoided by the trustee.

Period of exclusivity – A debtor in Chapter 11 has the exclusive
right to file a plan of reorganization for the first 120 days of its bankruptcy.
Thereafter, unless the period of exclusivity is extended by the court,
other parties may file reorganization plans.

Personal Bankruptcy – Filed by an individual; also called a household
bankruptcy, consumer bankruptcy, or wage-earner bankruptcy. (see
Chapter 13 and also Chapter 12).

Personal Property – Property that is not real property or affixed
to real property, such as cars, stock, furniture, etc.

Petition – (or Bankruptcy Petition or Petition for Relief) –
The document that commences a bankruptcy proceeding.

Plan of Reorganization – The document setting forth how a bankrupt
company plans to satisfy its creditors. The plan of reorganization is
the cornerstone of a successful Chapter 11 bankruptcy.

Property of the Estate -The property that is not exempt and belongs to
the bankruptcy estate. Property of the estate is usually sold by the trustee
and the claims of creditors paid from the proceeds.

Post-Petition – Occurring after the filing of a petition.

Preference – A payment by a debtor made during a specified period
(90 days or one year) prior to the filing that favors one creditor over
others. Preference payments can usually be recovered and returned to the
debtor’s estate.

Prepackaged Bankruptcy – A situation where a company and its creditors
agree to a plan of reorganization before the company files a bankruptcy
petition. In a true prepackaged bankruptcy, a plan of reorganization is
circulated and approved by creditors before the petition is filed. The
court then confirms the plan and the company emerges from bankruptcy quickly.

Pre-Petition – Occurring before the filing of a bankruptcy petition.

Priority Claims – Administrative expenses and salaries, wages, employee
benefits, customer deposits and taxes which occurred pre-petition.

Pro rata – Proportionately.

Proof of Claim – Form filed by a creditor setting out its claims
against a bankruptcy debtor.




Receiver – Particularly in foreign proceedings, or state court proceedings,
a person appointed by the court to take custody of a debtor’s property.

Reaffirm – The debtor can chose to reaffirm debts that would otherwise
be discharged by the bankruptcy. Generally, when a debt is reaffirmed,
the parties to the reaffirmed debt have the same rights and liabilities
that each had prior to the bankruptcy filing: the debtor is obligated
to pay and the creditor can sue or repossess if the debtor doesn’t pay

Relief from Stay – A creditor can ask the judge to lift the automatic
stay and permit some action against the debtor or the property of the
estate. If the motion is granted, the moving party (but no one else) is
free to take whatever action the court permits. Relief can be absolute,
for example, permitting the creditor to foreclose on property, or limited,
as for example, allowing the recordation of a notice of default.

Reorganization – The resolving of a Chapter 11 bankruptcy by the
emergence of the debtor as a viable business. Generally, the company agrees
with creditors on a plan for payment of their claims (plan of reorganization)
and emerges from Chapter 11 after the plan is confirmed by the court.

Repossession – Once in default, as defined by the creditor in the
security agreement, occurs, the creditor can: repossess the collateral
by self-help (depending on state law) or with the aid of a court order,
dispose of the collateral by public or private foreclosure sale, retain
the collateral in satisfaction of the debt, terminate the debtor’s
right of redemption, add the costs of repossession and foreclosure to
the unpaid balance of the debt, and pursue the debtor for any remaining
unpaid balance or deficiency.

Restructuring – A general term applied to an out-of-court attempt
to reorganize and satisfy debts. Similar to workout (
see below).

Retired Benefits Bankruptcy Protection Act – Passed June 16, 1988.
Allows the debtor to continue to pay insurance premiums for employees
during the course of a bankruptcy.

Reverse Leveraged Buyout – When a company that was a leveraged buyout
restructures its (usually unmanageable) debt by issuing new equity (usually
in exchange for some or all of the outstanding debt incurred during the
original leveraged buyout).

Rule 2004 – A provision of the Bankruptcy Code that allows one party
in a bankruptcy proceeding to compel discovery or other examination against
another party.



Schedules – The debtor must file the required lists of assets and
liabilities to commence a bankruptcy case, collectively called the schedules.

Section 77 (of 1933 Act) – Provided for reorganization of railroads
(during the 1930s a large number of railroads encountered extreme financial
difficulty); (see also
Section 77B).

Section 77B – Followed Section 77; provided for reorganization of
companies other than railroads.

Section 304 – The section of the present U.S. Bankruptcy code that
handles multi-national bankruptcies; only a few of these are filed each
year; over the period 1980 through 1988 there averaged about 6 filings
of Section 304 per year.

Secured Creditors – One of two general types of creditors of a company.
Secured creditors have a lien on property of the company.

Secured Debt -A claim secured by a lien in the debtor’s property
by reason of the debtor’s agreement or an involuntary lien such
as a judgment or tax lien. The creditor’s claim may be divided into
a secured claim, to the extent of the value of the collateral, and an
unsecured claim, equal to the remainder of the total debt. Generally,
a secured claim must be perfected under applicable state law to be treated
as a secured claim in the bankruptcy.

Set-off – The ability to discharge or reduce a debt by applying a
counter claim between the same parties. For example, a bank which has
lent money to a debtor may attempt to satisfy some or all of the loan
by seizing the debtor’s deposits at the bank.

Skeleton Filing – Term used at bankruptcy courts to describe a bankruptcy
filing in which not all the necessary forms have been filed. Certain courts
allow a case to commence if only certain important forms are filed so
long as the balance of required forms are forthcoming within a certain
period of time.

Small Claims (also sometimes called convenience claims) – Under a
plan of reorganization or liquidation, claims that are small (e.g. in
the hundreds or thousands of dollars range) and numerous are often grouped
into a single class and settled for cash for administrative convenience.

Straight Bankruptcy – An informal term for a Chapter 7 bankruptcy
or liquidation; used more commonly to describe liquidation before the
Bankruptcy Reform Act of 1978.

Substantial Abuse – A term that refers to the abusing of the privilege
to file a petition. It usually describes fraud in cases of personal bankruptcy.

Substantive Consolidation- The combination of the estate of one debtor
with the estate of one or more other debtors and the application of the
combined estate to satisfy their combined liabilities. Substantive consolidation
is often considered (although infrequently applied) in the case of parent/subsidiary
debtors and other affiliated entities.

Super-Priority Claim – An administrative claim that will be paid
ahead of other administrative and priority claims.



Tax Loss Carry-Forward – Losses, for tax purposes, that can be carried
forward and applied to reduce taxable income in future years. The Tax
Reform Act of 1986 imposed stringent restrictions on the use of tax loss
carry-forwards.

Trustee – An agent of the court who manages the property of the debtor
for the benefit of the creditors. The court appoints a trustee in most
Chapter 7 cases and in Chapter 11 cases when it determines that the debtor’s
management should not remain in control. This type of trustee should be
distinguished from the U.S. Trustee, who plays an administrative role
in all bankruptcy cases.



United States Trustee – An agent of the U.S. Department of Justice
appointed to assist in bankruptcy cases. The U.S. Trustee administers
many of the duties of the court including appointing committees, appointing
trustees and examiners, scrutinizing bankruptcy documents, etc. The United
States Trustee Program was begun in 1979. Presently, it covers all federal
judicial districts except for North Carolina and Alabama which are scheduled
to be included in October of 2002.

Unsecured Creditor – One of two general types of creditors of a company.
The unsecured creditors have no liens on the property of the company.

Unsecured Debt – A claim or debt is unsecured if there is no collateral
that is security for the debt. Most consumer debts are unsecured.



VCIS (Voice Case Information System) – A touchtone telephone service
provided by the court system that gives case filing information.

Voluntary Bankruptcy – Bankruptcy filed by the debtor itself, data
from the U.S. Administrative Office of the Courts subdivides bankruptcies
into voluntary and involuntary.

Vulture Funds – (also referred to as vulture capitalists or vulture
investors) – Investment groups that are prominent in the restructuring
of financially distressed and bankrupt companies usually by the buying
or selling of large pieces of the distressed company’s debt and/or equity.



Wage-Earner Bankruptcy – Bankruptcy proceedings for an individual
with the intention of re-scheduling the individual’s debt (rather
than liquidating the individual’s assets and debt; an individual
files under Chapter 7 to liquidate); Chapter 13 is referred to as wage-earner
bankruptcy, personal bankruptcy or consumer bankruptcy; Chapter 13 cannot
be used by a partnership or a corporation; it can be used by a sole proprietorship.

Workout – An arrangement, outside of bankruptcy, by a debtor and
its creditors for payment or re-scheduling of payment of the debtor’s
obligations. Usually applies to an informal agreement between a business
and its creditors, although it can be a formal agreement and it can apply
to consumer debtors.