railroad under chapter 11 bankruptcy

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  • January 17, 2017 at 7:49 pm #1443182
    jessanqi
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    which of the following types of debtor are not eligible for relief under chapter 11 of bankruptcy code.

    a. individuals.
    b. railroads.
    c. airlines.
    d. stockbrokers.

    The answer is B. this is from the appendix c: 2015 released aicpa questions.
    I think D should be the answer, railroads can not file under chp 7, but can under 11, and stockbrokers and commodity brokers are not eligible for chapter 11 according to Wiley textbook.

    I’m not sure which one is right, so can you please kindly help to confirm? thanks so much!!! 🙂

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  • January 17, 2017 at 9:58 pm #1443234
    nk522
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    It is railroads because anyone who can be a debtor under Chapter 7 (except for a stockbroker), can be a debtor under Chapter 11, and given that Railroads may not file for bankruptcy under Chapter 7, that would apply for Chapter 11 as well.

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    January 17, 2017 at 10:30 pm #1443254
    Skynet
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    I call BS on that!

    I owned several Railroads in Monopoly and was still able to file Bankruptcy.

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    January 19, 2017 at 11:13 am #1444322
    nk522
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    @jessanqi Hey, I just found this problem, and this answer is Stockbrokers, not railroads…my mistake.

    Which of the following types of debtor are not eligible for relief under Chapter 11 of the Bankruptcy Code?
    a. Railroads.
    b. Airlines.
    c. Individuals.
    d. Stockbrokers.

    Explanation
    Choice “d” is correct. Although both individuals and corporations are generally eligible for relief under Chapter 11, stockbrokers are specifically excluded.

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    January 19, 2017 at 3:45 pm #1444526
    jessanqi
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    Thank you so much for the verification 🙂 @nk522

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