The question probes the nuanced understanding of a liquidator’s power concerning pre-insolvency transactions under Alaska’s insolvency framework, specifically focusing on transactions that might be challenged as voidable preferences. Alaska’s insolvency laws, largely mirroring federal bankruptcy principles where applicable, grant liquidators the authority to review and potentially avoid certain transactions made by the debtor prior to insolvency that unfairly advantage specific creditors. A transaction is generally considered a voidable preference if it was made for an antecedent debt, within a specific look-back period (often 90 days for ordinary creditors and one year for insiders), while the debtor was insolvent, and it resulted in the creditor receiving more than they would have in a Chapter 7 liquidation. The liquidator’s role is to recover such assets for the benefit of the general creditor body. In this scenario, the payment to Aurora Fisheries, Inc. for services rendered within the 90-day period prior to the company’s liquidation filing, while the company was demonstrably insolvent, and for an antecedent debt, fits the criteria of a voidable preference. The liquidator’s power extends to recovering this payment. The core principle is to restore the debtor’s estate to its condition before the preferential transfer, thereby promoting equitable distribution among all creditors. Other options are less accurate because they either mischaracterize the liquidator’s powers, focus on non-voidable transactions, or suggest limitations not present in the standard framework for challenging preferential payments. For instance, a transaction for new value provided contemporaneously would not be a preference. Furthermore, the mere fact that a creditor is secured does not automatically shield all payments made to them from scrutiny if those payments constitute preferences. The liquidator’s duty is to maximize the estate for all creditors, and this includes clawing back preferential payments.

The scenario involves a corporate debtor, “Northern Lights Fisheries Inc.,” incorporated in Alaska, facing severe financial distress. The core issue is the potential for certain transactions to be deemed preferential under Alaska’s insolvency framework, specifically the Alaska Uniform Voidable Transactions Act (AUVTA), which largely mirrors the Uniform Voidable Transactions Act. A preferential transaction, under AS 34.40.010 et seq., is generally a transfer of property made by an insolvent debtor to or for the benefit of a creditor on account of an antecedent debt, made within a certain period before the commencement of insolvency proceedings, where such transfer enables the creditor to receive more than they would have received in a distribution of the debtor’s property under an insolvency proceeding. To determine if a transaction is preferential, several elements must be met: 1. **Insolvency of the Debtor:** The debtor must be insolvent at the time of the transfer. Insolvency is generally defined as a state where the present fair salable value of the debtor’s property is less than the amount of the debtor’s probable liability on existing debts as they become absolute and matured. 2. **Transfer to a Creditor:** The transfer must be for the benefit of a creditor. 3. **On Account of an Antecedent Debt:** The transfer must satisfy a debt that existed prior to the transfer. 4. **Enabling the Creditor to Receive More:** The transfer must allow the creditor to receive a greater percentage of their debt than other creditors of the same class would receive in a hypothetical liquidation under Alaska law. 5. **Timing:** The transfer must occur within a specified period before the commencement of insolvency proceedings. For non-insider creditors, this period is typically one year. For insider creditors, it is often shorter (e.g., 90 days). In the case of Northern Lights Fisheries Inc., the payment of $50,000 to “Arctic Supply Co.” for fishing gear purchased three months prior to the filing of an involuntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code (which aligns with insolvency proceedings under state law for practical purposes in this context) needs to be analyzed. Assuming Northern Lights Fisheries Inc. was indeed insolvent at the time of the payment, and Arctic Supply Co. is a general unsecured creditor, the key question is whether this payment allows Arctic Supply Co. to receive more than other unsecured creditors. In a Chapter 7 liquidation, unsecured creditors typically receive a pro rata share of the remaining assets after secured and priority claims are satisfied. If Arctic Supply Co. received $50,000 and other unsecured creditors would receive, for example, only 10% of their claims in a liquidation, then this payment would likely be considered preferential. The timing of three months before the bankruptcy filing falls within the typical preference period for non-insiders. The purpose of voiding preferential transfers is to ensure equitable distribution among all creditors and prevent debtors from favoring certain creditors in anticipation of insolvency.

The scenario presented involves a corporate debtor, Aurora Borealis Enterprises (ABE), incorporated in Alaska, facing significant financial distress. ABE has a secured creditor, Northern Bank, holding a perfected security interest in all of ABE’s assets. Additionally, ABE owes wages to its employees for the two months preceding its insolvency filing. Alaska’s insolvency framework, largely mirroring federal bankruptcy principles but with specific state nuances, prioritizes claims. Under Alaska law, as generally under federal bankruptcy law, secured creditors with perfected security interests are entitled to satisfaction from the proceeds of their collateral. Employee wage claims, while often granted preferential status, are typically subordinate to validly perfected secured claims to the extent of the value of the collateral securing the debt. If the collateral’s value is insufficient to cover the secured debt, any remaining deficiency is treated as an unsecured claim. Preferential claims for wages are generally limited to a certain amount and period preceding the insolvency filing. In this case, Northern Bank’s perfected security interest gives it priority over the proceeds from the sale of ABE’s assets up to the amount of its secured debt. The employee wage claims, though preferential, are paid after the secured creditor is satisfied from the collateral’s proceeds. If the collateral sale proceeds are entirely absorbed by Northern Bank’s secured claim, the employees’ wage claims would then be treated as general unsecured claims, subject to the pro rata distribution among other unsecured creditors. The question asks about the distribution of the proceeds from the sale of ABE’s assets. Since Northern Bank has a perfected security interest in all of ABE’s assets, it has the primary claim to those proceeds. The employees’ wage claims, while preferential, are subordinate to the secured claim of Northern Bank. Therefore, Northern Bank will receive the proceeds from the sale of the assets first, up to the amount of its secured debt. The remaining proceeds, if any, would then be available for other claims, including the employees’ wage claims if they are not fully satisfied by the sale of collateral. Given the phrasing, the correct distribution prioritizes the secured creditor.

The scenario involves a company, “Arctic Fisheries Inc.,” incorporated in Alaska, facing severe financial distress. The core issue is the potential for a creditor, “Northern Supplies Ltd.,” to initiate involuntary bankruptcy proceedings. Under the United States Bankruptcy Code, specifically Chapter 7 or Chapter 11, a certain number of creditors whose claims are not contingent, subject to a bona fide dispute, or the subject of a bona fide proceeding to determine their amount, can petition for involuntary bankruptcy. For entities with twelve or more creditors, at least three creditors must join in the petition. If the debtor has fewer than twelve creditors, then only one creditor may file. The total amount of the petitioning creditors’ claims must aggregate at least \( \$19,100 \) in the case of an involuntary case under Chapter 7 or Chapter 11, as adjusted periodically for inflation. In this case, Arctic Fisheries Inc. has 15 known creditors, and Northern Supplies Ltd. is one of them. Northern Supplies Ltd.’s claim of \( \$8,500 \) is not contingent, not subject to a bona fide dispute, and not the subject of a bona fide proceeding to determine its amount. Since Arctic Fisheries Inc. has more than twelve creditors, Northern Supplies Ltd. needs at least two other creditors to join its petition. The question asks about the minimum number of additional creditors required for Northern Supplies Ltd. to successfully file an involuntary petition. Given that Arctic Fisheries Inc. has 15 creditors, and the rule for entities with 12 or more creditors requires at least three creditors to file, Northern Supplies Ltd. needs two additional creditors to join its petition to meet the threshold of three petitioning creditors. The amount of Northern Supplies Ltd.’s claim (\( \$8,500 \)) is also relevant as it must meet the minimum aggregate claim amount when combined with other petitioning creditors, but the question focuses on the number of creditors. Therefore, the minimum number of additional creditors required is two.

The scenario describes a situation where a director of an Alaskan corporation, “Aurora Borealis Enterprises,” made a series of payments to a specific supplier shortly before the company’s insolvency. These payments were made within the ninety-day period preceding the commencement of insolvency proceedings and were for antecedent debts that were not due at the time of payment. Under Alaska Statute 11.46.070, such payments made to a creditor that enable that creditor to receive a greater percentage of their debt than other creditors of the same class could receive in a liquidation proceeding are considered preferential transfers. The purpose of these provisions is to ensure equitable distribution of the debtor’s limited assets among all creditors. The payments to “Northern Lights Supplies” on August 15, 2023, September 10, 2023, and October 5, 2023, fall within this ninety-day look-back period. The payments were for debts incurred prior to these dates and, crucially, Aurora Borealis Enterprises was insolvent at the time these payments were made, and the payments allowed Northern Lights Supplies to receive more than it would have in a Chapter 7 liquidation. Therefore, these payments are recoverable by the insolvency practitioner as preferential transfers. The remaining options are incorrect because they either misinterpret the look-back period, the conditions for a preferential transfer, or the legal framework governing such recoveries in Alaska. For instance, a payment made outside the statutory look-back period or a payment made for a debt that was due at the time of payment might not be considered preferential. Furthermore, the concept of “ordinary course of business” is a defense to a preference claim, but the facts presented suggest these payments were made to a specific supplier, and the timing and nature of the payments (for antecedent debts not yet due) do not align with a typical defense.

In Alaska, the Uniform Voidable Transactions Act (UVTA), codified at Alaska Statutes Title 10, Chapter 18, governs the avoidance of fraudulent transfers. A transfer made or obligation incurred by a debtor is voidable under AS 10.18.041 if the debtor made the transfer or incurred the obligation with actual intent to hinder, delay, or defraud any creditor. This intent can be inferred from various factors, often referred to as “badges of fraud,” which are circumstantial evidence of fraudulent intent. These badges include factors such as a transfer to an insider, retention of possession or control of the asset transferred, the transfer was disclosed or concealed, the debtor had been sued or threatened with suit, the transfer was of substantially all the debtor’s assets, the debtor absconded, the debtor removed assets, the debtor defaulted on a significant debt, or the transfer occurred shortly before or after a substantial debt was incurred. Another basis for voidability under AS 10.18.041 is if the debtor received less than a reasonably equivalent value in exchange for the transfer or obligation, and the debtor was insolvent on the date of the transfer or became insolvent as a result of the transfer, or was engaged in a business or transaction for which the remaining assets were unreasonably small in relation to the transaction, or intended to incur debts beyond the debtor’s ability to pay as they matured. When a transfer is deemed voidable under the UVTA, the remedies available to a creditor include avoidance of the transfer or obligation to the extent necessary to satisfy the creditor’s claim, or an attachment by the creditor of the asset transferred or other property of the transferee. The Alaska UVTA, like its Uniform Law Commissioners’ predecessor, aims to ensure that debtors cannot unfairly prejudice their creditors by disposing of assets in a manner that defeats legitimate claims. The question asks about the primary legal mechanism in Alaska for a creditor to challenge a transfer made by a debtor shortly before a significant debt matured, where the debtor received less than fair value, and the transfer was to a related entity. This scenario strongly suggests a fraudulent transfer claim under the UVTA.

The scenario describes a situation where a company, “Northern Lights Expeditions,” incorporated in Alaska, is facing severe financial distress and is unable to meet its obligations as they fall due. The primary objective in such a situation, under Alaska insolvency law, is to ensure a fair and orderly distribution of the company’s remaining assets to its creditors, while also considering the possibility of rehabilitation if viable. The question asks about the most appropriate initial step an insolvency practitioner would take. When a company becomes insolvent, the immediate priority is to preserve the value of the assets and to initiate a process that provides legal protection from creditors’ actions. This typically involves appointing an insolvency practitioner to take control of the company’s affairs. The Alaska Insolvency Act, while not a standalone comprehensive code like federal bankruptcy law, interacts with federal bankruptcy provisions and state-level remedies. However, the core principles of insolvency law in Alaska, mirroring general insolvency principles, emphasize the need for a structured process. The options present various actions. Option a) suggests filing a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code. Chapter 7 is a liquidation process, which is a common outcome for insolvent businesses that cannot be reorganized. Filing this petition immediately places the company under the protection of the federal bankruptcy court, which is the primary forum for most business insolvencies in the United States, including Alaska. This action halts creditor actions and allows for an orderly winding up of the business. Option b) proposes seeking a court order for a receivership under Alaska state law. While receivership is a form of insolvency proceeding available under state law, it is often less comprehensive than federal bankruptcy and may not offer the same level of protection or the full range of remedies available under the Bankruptcy Code, particularly for corporate entities. Option c) suggests negotiating a debt restructuring agreement directly with major creditors without formal legal intervention. While informal workouts can be effective in some situations, they are generally insufficient for a company facing widespread inability to pay debts and do not provide the legal certainty or protection afforded by a formal insolvency process. Option d) advocates for the immediate sale of all company assets to the highest bidder without court supervision. This approach is highly risky, could lead to undervaluation of assets, and would likely violate creditor rights and the principles of orderly distribution of assets, potentially exposing the directors to personal liability. Given the company’s inability to meet its obligations, the most prudent and legally sound initial step to protect the company’s assets and manage its liabilities in an orderly fashion, in alignment with the overarching insolvency framework applicable in Alaska (which largely relies on federal bankruptcy law for corporate insolvencies), is to initiate a formal insolvency proceeding. A Chapter 7 filing provides the most immediate and comprehensive protection and framework for liquidation.

The core issue in this scenario revolves around the concept of voidable preferences under the Alaska Bankruptcy Code, specifically focusing on transactions that occur within the ninety-day “look-back” period prior to the filing of a bankruptcy petition. A preferential transfer is generally defined as a transfer of a debtor’s property to or for the benefit of a creditor, for or on account of an antecedent debt, made while the debtor was insolvent, and which enables the creditor to receive more than such creditor would receive in a Chapter 7 liquidation. In Alaska, as in federal bankruptcy law, the trustee has the power to avoid such preferential transfers. To determine if the payment made by Aurora Borealis Inc. to Northern Lights Supply Co. is a voidable preference, we analyze the elements: 1. **Transfer of an interest of the debtor in property:** Aurora Borealis Inc. transferred \( \$15,000 \) from its bank account to Northern Lights Supply Co. This constitutes a transfer of the debtor’s property. 2. **For or on account of an antecedent debt:** The payment was made to satisfy an existing debt for goods previously supplied by Northern Lights Supply Co. 3. **Made while the debtor was insolvent:** While the exact balance sheet is not provided, the filing of a bankruptcy petition implies insolvency. The trustee is presumed to have established insolvency for transfers made within the look-back period. 4. **Made on or within 90 days before the date of the filing of the petition:** The payment was made on October 15, 2023, and the petition was filed on November 10, 2023. This falls within the 90-day period. 5. **Enables such creditor to receive more than that creditor would receive if:** * The transfer had not been made; * Such chapter had been instituted; and * The creditor received payment of such debt to such extent as allowed under the provisions of this title. Northern Lights Supply Co. is an unsecured creditor. In a Chapter 7 liquidation, unsecured creditors typically receive a pro-rata distribution of the remaining assets after secured and priority claims are paid. Assuming Aurora Borealis Inc. has insufficient assets to pay all its unsecured creditors in full, Northern Lights Supply Co. would likely receive less than the full \( \$15,000 \) if the payment had not been made. Therefore, the payment enabled Northern Lights Supply Co. to receive more than it would have received in a Chapter 7 liquidation. The exception for ordinary course of business payments (11 U.S.C. § 547(c)(2)) does not apply here because the payment was made on an overdue account, not in the ordinary course of business for either party. The payment was to satisfy an antecedent debt that was past due. Therefore, the trustee can avoid the \( \$15,000 \) transfer as a preferential payment. The trustee’s action to recover the funds would be successful.

The scenario presented involves a company, “Aurora Borealis Expeditions,” incorporated in Alaska, facing severe financial distress. The core issue is the potential for its directors to be held personally liable for certain corporate debts. Alaska’s insolvency framework, like many jurisdictions, distinguishes between the separate legal personality of a corporation and the personal liability of its directors. Generally, directors are shielded from personal liability for corporate debts, a principle known as the corporate veil. However, this shield is not absolute. Directors can become personally liable if they engage in wrongful acts or omissions that contravene specific statutory duties or common law principles. In Alaska, the Business Corporation Act (AS 10.06) outlines director duties, including the duty of care and the duty of loyalty. A breach of these duties, particularly in the context of insolvency, can lead to personal liability. For instance, if directors continue to incur debt or trade when they know or ought to know that the company is insolvent and has no reasonable prospect of avoiding insolvency, this could constitute wrongful trading or fraudulent conduct. Such actions can pierce the corporate veil, making directors personally responsible for debts incurred during that period. Specifically, AS 10.06.475 addresses liability for unlawful distributions, and AS 10.06.480 discusses liability for corporate actions. While there isn’t a direct equivalent to a “wrongful trading” statute as seen in the UK, the common law principles of piercing the corporate veil, coupled with statutory duties, allow for director liability. Furthermore, if directors fail to act in the best interests of the company, which includes initiating insolvency proceedings when appropriate to mitigate creditor losses, they could face scrutiny. The question asks about the directors’ potential liability for debts incurred *after* the company became insolvent, specifically for services rendered by “Glacier Guides Inc.” The key is to determine if the directors acted with knowledge of insolvency and without a reasonable prospect of avoiding it, thereby breaching their duties. In Alaska, as in many states, the obligation shifts to act with a higher degree of care for creditors when insolvency is imminent or has occurred. The liability is not automatic but arises from specific actions or inactions that are deemed reckless or fraudulent in the face of insolvency. The correct answer hinges on the directors’ awareness of the company’s insolvent state and their subsequent actions, which could include continuing to operate and incur new debts without a viable plan for recovery, thus prejudicing creditors.

In Alaska, when a corporation enters insolvency proceedings, the concept of “clawback” or avoidance powers held by the insolvency practitioner is crucial for maximizing the asset pool available for distribution to creditors. These powers allow the practitioner to recover assets that were improperly transferred prior to the insolvency. Specifically, Alaska insolvency law, drawing from federal bankruptcy principles and state corporate law, addresses transactions that may have unfairly benefited certain parties at the expense of the general body of creditors. A common category of such transactions is preferential payments. Under Alaska law, a preferential payment is generally a transfer of property of the debtor for or on account of a pre-existing debt made within a specified period before the commencement of insolvency proceedings, made while the debtor was insolvent, and which enables the creditor to whom the transfer was made to receive a greater percentage of their debt than other creditors of the same class. The look-back period for preferential payments is typically 90 days before the filing date for ordinary creditors, but it can be extended to one year if the recipient is an “insider” (such as a director or controlling shareholder). Another significant area is fraudulent transfers, also known as fraudulent conveyances. These are transactions where the debtor transferred assets with the intent to hinder, delay, or defraud creditors, or for less than reasonably equivalent value while insolvent or rendered insolvent by the transfer. Alaska law, like many jurisdictions, adopts principles from the Uniform Voidable Transactions Act (UVTA) for non-bankruptcy fraudulent transfers, and similar concepts are embedded within federal bankruptcy law. The look-back period for fraudulent transfers can be longer, often extending to several years, depending on the specific circumstances and intent. The question asks about the maximum look-back period for recovering payments made to a non-insider creditor that constitute a preference. Based on the general principles of preferential transfers in insolvency law, the standard look-back period for non-insiders is 90 days prior to the insolvency filing. While fraudulent transfers can have longer look-back periods, the question specifically focuses on “payments made to a non-insider creditor that constitute a preference.” Therefore, the 90-day period is the relevant timeframe for this specific type of avoidance action.

The scenario describes a situation where an insolvency practitioner, acting as a liquidator for a defunct Alaskan corporation, seeks to recover assets transferred by the corporation prior to its insolvency. Specifically, the transfer of a significant parcel of land to a subsidiary corporation, controlled by the former directors, within the ninety days preceding the commencement of liquidation proceedings, raises concerns about potential preferential treatment. Alaska Statute 32.06.802 addresses fraudulent transfers and provides a framework for liquidators to challenge such transactions. Under Alaska law, a transfer made by an insolvent corporation within a certain period before the commencement of insolvency proceedings, which gives a creditor or an insider a greater percentage of their claim than other creditors of the same class, can be considered a preference. The ninety-day look-back period is critical here, as is the fact that the transferee is a subsidiary controlled by former directors, making them insiders. The liquidator’s objective is to unwind this transaction, thereby bringing the value of the land back into the general asset pool available for distribution to all creditors, in accordance with the principles of equitable distribution that underpin insolvency law. The purpose of clawback provisions, such as those found in AS 32.06.802, is to prevent debtors from unfairly favoring certain creditors or insiders at the expense of others, thereby preserving the integrity of the insolvency process and maximizing returns for the collective body of creditors. The key legal concept being tested is the recovery of preferential transfers under Alaskan insolvency statutes.

The question probes the specific nature of a “preference” under Alaska’s insolvency framework, particularly concerning payments made to creditors. Alaska, like many jurisdictions, aims to ensure equitable distribution of a debtor’s assets among all creditors by scrutinizing transactions that unfairly benefit one creditor over others shortly before insolvency. A preferential payment is generally defined as a transfer of property made by an insolvent debtor to or for the benefit of a creditor, for or on account of a pre-existing debt, made within a certain period before the filing of a bankruptcy petition or the commencement of insolvency proceedings, while the debtor was insolvent. The purpose is to prevent debtors from favoring certain creditors as their financial situation deteriorates. The key elements to consider are the debtor’s insolvency at the time of the transfer, the transfer being for an antecedent debt, and the timing of the transfer relative to the insolvency proceedings. Alaska Statute 11.56.230, while dealing with fraudulent conveyances, provides a foundational understanding of transactions that undermine creditor rights, and insolvency law principles, often aligned with federal bankruptcy law in practice for many aspects, define preferences more narrowly. A payment that allows a creditor to receive more than they would have received in a Chapter 7 bankruptcy liquidation is typically considered preferential. For instance, if a debtor pays a significant portion of an unsecured debt to a single unsecured creditor just before filing for bankruptcy, this payment would likely be deemed a preference because it allows that creditor to recover more than their pro-rata share of the remaining assets available to unsecured creditors. The look-back period, which is crucial for identifying preferences, is typically 90 days for ordinary creditors and one year for insiders under federal bankruptcy law, and similar principles are often applied or considered in state-level insolvency matters or when federal bankruptcy is involved. The focus is on restoring the debtor’s estate to the position it would have been in had the preferential payment not occurred, thereby promoting fairness among the creditor body.

The question concerns the priority of claims in an insolvency proceeding under Alaska law, specifically focusing on the distinction between a secured creditor’s rights and a preferential claim for unpaid wages. In Alaska, as in most U.S. jurisdictions, secured creditors generally have priority over unsecured creditors, including those with claims for wages. The Alaska Bankruptcy Act, while not a separate state bankruptcy code, operates within the framework of federal bankruptcy law, which establishes a hierarchy of claims. Section 507 of the U.S. Bankruptcy Code provides for certain priority claims, including for wages earned within a specified period before the bankruptcy filing. However, these priority wage claims are subordinate to secured claims unless the security interest is invalid or avoidable. A creditor holding a valid, perfected security interest in specific collateral generally has the right to be paid from the proceeds of that collateral before unsecured creditors, including those with priority wage claims, receive anything from that collateral. Therefore, the secured creditor’s claim on the collateral securing their loan would be satisfied first. The remaining assets, if any, would then be distributed according to the priority scheme for unsecured claims, which would include the preferential wage claims.

The scenario involves a corporate insolvency proceeding in Alaska where a secured creditor, NorthStar Bank, holds a perfected security interest in substantially all of the assets of Arctic Industries, Inc. Arctic Industries has entered into a Chapter 11 bankruptcy proceeding. Under Alaska insolvency law, which largely aligns with federal bankruptcy principles, secured creditors have a priority claim to the value of their collateral. The Bankruptcy Code, specifically 11 U.S.C. § 506(a), generally defines a secured claim as the extent of the creditor’s interest in the property. However, the question focuses on the *nature* of the claim in relation to the debtor’s ongoing operations and the potential for reorganization. While NorthStar Bank’s claim is secured by the assets, its ability to dictate the terms of a reorganization plan, particularly concerning the disposition or use of its collateral, is balanced against the debtor’s right to propose a plan that might involve continued use of the assets, subject to adequate protection. The concept of “adequate protection” is crucial here, as it ensures the secured creditor does not lose value during the reorganization process. However, the question asks about the *fundamental characterization* of the claim in the context of a reorganization, not the specific procedural steps for adequate protection. A secured claim remains a secured claim throughout the process, even if its value is debated or if the collateral is used. The primary distinction in insolvency law is between secured, unsecured, and priority claims. NorthStar Bank’s claim is unequivocally secured by its perfected interest. The other options represent incorrect classifications or misinterpretations of the creditor’s position. An unsecured claim would arise if the collateral was insufficient to cover the debt or if the security interest was unperfected. A priority claim typically refers to claims that are granted special status by statute, such as administrative expenses or certain tax claims, which are generally subordinate to secured claims with respect to the collateral itself. A contingent claim is one whose existence or amount depends on a future event, which is not the primary characteristic of NorthStar Bank’s claim, though elements of contingency might arise in the valuation of the collateral or the success of the reorganization. Therefore, the most accurate and fundamental characterization of NorthStar Bank’s claim in this context is as a secured claim.

The scenario involves a corporation, “Aurora Borealis Expeditions Inc.,” incorporated in Alaska, facing severe financial distress. The question probes the appropriate initial step for a director to take when the company is demonstrably insolvent and unable to meet its financial obligations as they fall due. Alaska law, like many jurisdictions, imposes duties on directors even when a company is insolvent. These duties can shift from primarily owing a duty to the corporation and its shareholders to also owing a duty to the corporation’s creditors. The most prudent and legally advisable initial action for a director in such a situation, before any formal insolvency proceedings are initiated, is to seek independent legal and financial advice. This is crucial for understanding the scope of their fiduciary duties, the potential liabilities they face, and the available courses of action under Alaska’s insolvency framework, such as the Alaska Corporations Act and relevant federal bankruptcy laws. Failing to obtain expert advice can lead to personal liability for director misconduct or negligence during the period of insolvency. Other options, while potentially part of a later insolvency process, are not the immediate, primary, and most legally sound first step for a director facing such a crisis. For instance, unilaterally ceasing all business operations might be a consequence of insolvency but isn’t the initial step a director should take to navigate the legal complexities. Filing for bankruptcy is a formal process that follows assessment and advice. Distributing remaining assets to specific creditors without proper legal guidance could constitute a preferential transfer, which is actionable in insolvency proceedings. Therefore, the paramount initial step is to secure professional counsel.

The question asks to identify the primary legal mechanism for a foreign corporation operating in Alaska to seek protection and potential restructuring under U.S. insolvency laws when it faces significant financial distress and its assets are primarily located outside the United States, but it has a material place of business in Alaska. Chapter 15 of the U.S. Bankruptcy Code, titled “Cross-Border Insolvency,” governs the treatment of cases involving debtors with assets or creditors in more than one country. This chapter is based on the UNCITRAL Model Law on Cross-Border Insolvency. Its purpose is to provide an effective framework for cooperation between U.S. courts and foreign courts or foreign representatives, and to facilitate the coordination of insolvency proceedings. A foreign proceeding is defined as a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency or adjustment of debt in which, for the purpose of liquidation or reorganization of the debtor’s business, the assets and affairs of the debtor are subject to the control or supervision of a foreign court, for the purpose of consolation or rehabilitation of the debtor. A foreign representative is a person or body, including one appointed on an interim basis, authorized to administer the reorganization or the liquidation of the foreign debtor’s assets or affairs or to act as a representative of foreign creditors. When a foreign company has a place of business in Alaska, even if its principal assets are elsewhere, it may be considered to have a connection to the U.S. jurisdiction sufficient to warrant recognition of its foreign insolvency proceeding. The foreign representative can petition the U.S. bankruptcy court for recognition of the foreign proceeding. Upon recognition, the foreign representative can seek various forms of relief, including an automatic stay on actions against the debtor’s U.S. assets and the ability to commence a U.S. ancillary case under Chapter 7 or Chapter 11 of the Bankruptcy Code. While Chapter 11 of the U.S. Bankruptcy Code generally deals with reorganization of U.S. entities, and Chapter 7 deals with liquidation, Chapter 15 is specifically designed for the cross-border context. It allows for the recognition of foreign proceedings and the provision of ancillary relief, which can include the commencement of a U.S. Chapter 11 or Chapter 7 case if it is necessary to protect the assets of the debtor or the interests of creditors in the United States. Therefore, Chapter 15 provides the framework for a foreign company with a presence in Alaska to navigate U.S. insolvency law in conjunction with its foreign proceedings. The other options are less appropriate: Chapter 11 of the U.S. Bankruptcy Code is primarily for domestic reorganizations and, while an ancillary Chapter 11 can be commenced under Chapter 15, Chapter 15 itself is the overarching mechanism for cross-border cases. The Alaska Business Corporation Act governs the formation and operation of corporations in Alaska but does not provide a framework for international insolvency proceedings. Receivership, while a form of insolvency proceeding, is typically initiated by a secured creditor and is not the primary mechanism for a distressed foreign entity to seek broad protection and coordinate with foreign proceedings under U.S. law.

The scenario involves a corporation, “Aurora Borealis Ventures Inc.,” operating in Alaska and facing severe financial distress. The question probes the understanding of a director’s duties and liabilities when the company is insolvent or nearing insolvency, specifically concerning transactions that might prejudice creditors. Under Alaska insolvency law, and generally under corporate law principles that inform insolvency proceedings, directors have a continuing fiduciary duty to the corporation, which expands to include a duty to creditors when the company is insolvent. This is often referred to as the “zone of insolvency” or “creditors’ quasi-trust fund doctrine.” In this case, Aurora Borealis Ventures Inc. is demonstrably insolvent, as it cannot meet its financial obligations as they become due. The director, Mr. Kaelen, authorized the sale of a significant asset, the “Northern Lights Facility,” to a related entity, “Polaris Holdings LLC,” for a price below its fair market value. This transaction occurred while the company was insolvent. Such a transaction, especially when it benefits a related party and depletes assets that could otherwise satisfy creditor claims, is likely to be scrutinized as a fraudulent transfer or a preference, depending on the specific timing and intent. The core legal principle at play is that directors must act in good faith and with the care of an ordinarily prudent person in a like position. When insolvency looms or is present, this duty shifts to protecting the interests of the corporate body as a whole, which effectively means protecting the pool of assets available for creditors. Disposing of assets at undervalue to a related party, when the company is insolvent, is a breach of this duty. It constitutes an improper dissipation of assets that are rightfully available to satisfy the claims of creditors. The legal consequences for Mr. Kaelen would typically involve personal liability for the loss occasioned to the corporation and its creditors. This could manifest as a claim for breach of fiduciary duty, or the transaction itself could be unwound or challenged by a liquidator or trustee appointed in insolvency proceedings under provisions similar to those found in the Uniform Voidable Transactions Act, which Alaska has adopted in part. The sale price of \( \$1.5 \) million for an asset valued at \( \$2.2 \) million represents a \( \$0.7 \) million deficit that directly harms the creditors. Therefore, Mr. Kaelen’s liability would be related to this deficit, as it represents the amount by which creditors’ claims could not be satisfied due to his actions. The calculation of his direct liability would be the difference between the fair market value and the sale price, which is \( \$2,200,000 – \$1,500,000 = \$700,000 \). This amount reflects the loss caused to the creditor pool.

The scenario presented involves a director of an Alaska-based corporation, “Aurora Borealis Ventures Inc.”, who, knowing the company’s dire financial straits and impending insolvency, transferred a significant portion of the company’s assets to a subsidiary controlled by his family. This action, undertaken shortly before the company’s formal liquidation proceedings commenced under Alaska’s insolvency statutes, is a classic example of a fraudulent transfer. Alaska law, like many jurisdictions, aims to preserve the assets of an insolvent entity for the benefit of all creditors. Such transfers, made with the intent to hinder, delay, or defraud creditors, or for less than reasonably equivalent value when the transferor is insolvent, are voidable by the appointed liquidator. The liquidator’s primary duty is to marshal all company assets and distribute them equitably among creditors according to their statutory priorities. Recovering assets that have been improperly transferred is a crucial part of this duty. The transfer to a related entity for less than fair value, especially when the company was on the brink of insolvency, strongly indicates a fraudulent intent or, at the very least, a transaction that unfairly prejudices creditors. Therefore, the liquidator would have a strong basis to seek the avoidance of this transfer and the return of the assets to the corporate estate for distribution to all creditors. This principle is fundamental to maintaining the integrity of the insolvency process and ensuring fairness among stakeholders.

The scenario involves a corporate debtor, “Aurora Borealis Enterprises,” incorporated in Alaska, which has entered into a loan agreement with “Glacier National Bank.” The loan is secured by a comprehensive security interest over all of Aurora’s assets, including its accounts receivable and inventory. Aurora subsequently defaults on its loan obligations. Glacier National Bank, as a secured creditor, has the right to enforce its security interest. In Alaska, as in most U.S. jurisdictions, secured creditors generally have priority over unsecured creditors with respect to the collateral securing their debt. This priority is typically established and maintained through proper perfection of the security interest, often via Uniform Commercial Code (UCC) filings. Upon default, the secured creditor can typically take possession of the collateral and dispose of it in a commercially reasonable manner to satisfy the outstanding debt. The proceeds from the disposition are applied first to the costs of repossession and sale, then to the secured debt owed to Glacier National Bank. Any surplus would be available for distribution to other creditors, while any deficit would leave Glacier National Bank as an unsecured creditor for the remaining amount, subject to the claims of other unsecured creditors. The question tests the understanding of secured creditor rights and the priority of claims in an insolvency context under Alaskan law, which aligns with general UCC principles governing secured transactions. The core concept is the enforcement of a perfected security interest by a secured creditor upon a debtor’s default, which takes precedence over unsecured claims against the specific collateral.

The scenario involves a corporate insolvency proceeding in Alaska where a secured creditor, Arctic Ventures LLC, holds a valid lien on substantially all of the assets of Bering Industries, Inc. Bering Industries is undergoing liquidation under Chapter 7 of the U.S. Bankruptcy Code. The question probes the priority of claims against the debtor’s assets. In bankruptcy, secured claims are generally paid from the proceeds of the collateral securing them before unsecured claims. Alaska law, like federal bankruptcy law, recognizes the priority of secured creditors. Arctic Ventures’ lien attaches to the specific assets pledged as collateral. The proceeds from the sale of these assets, after accounting for any costs of sale and senior liens (which are not indicated here), are primarily for the benefit of Arctic Ventures. Unsecured creditors, including trade suppliers and employees with wage claims that exceed statutory limits for priority, would only receive distributions from any remaining assets after secured claims are satisfied, or if the collateral sale proceeds are insufficient to cover the secured debt. Therefore, Arctic Ventures, as a secured creditor, has the primary right to the proceeds generated from the sale of its collateral, subject to the administrative expenses of the bankruptcy estate. The trustee’s fees and expenses related to the sale of the collateral are typically paid from the proceeds before distribution to the secured creditor, a concept known as “surcharge” under 11 U.S.C. § 506(c). However, the question asks about the priority of Arctic Ventures’ claim relative to other creditors in general, and its secured status grants it a superior claim to its collateral.

The question concerns the priority of claims in an Alaska corporate insolvency proceeding, specifically focusing on the interplay between secured creditors and certain statutory liens. In Alaska, as in many U.S. jurisdictions, secured creditors generally hold a superior position concerning the collateral that secures their debt. This priority stems from the Uniform Commercial Code (UCC), which governs secured transactions. Under Alaska law, a perfected security interest typically attaches to the collateral and grants the secured party rights that are senior to most other claims, including unsecured creditors and even some statutory liens if not properly perfected or if the statute creating the lien explicitly subordinates it. However, certain statutory liens, such as those for unpaid labor or specific taxes, can sometimes achieve superpriority status under specific statutory provisions, even over previously perfected security interests. The key to determining priority often lies in the specific wording of the lien statute and the timing and perfection of the security interest. In this scenario, the bank has a perfected security interest in all of the corporation’s assets, including its inventory and accounts receivable. This perfection, typically achieved through filing a UCC-1 financing statement, establishes the bank’s priority. The claim for unpaid wages for the last 90 days of employment, while often granted priority as a preferential claim under federal bankruptcy law (e.g., Section 507(a)(4) of the Bankruptcy Code) and potentially under state law, is generally subordinate to a properly perfected security interest in the specific collateral that the secured party has a claim against. Alaska’s insolvency statutes, which often mirror federal bankruptcy principles or provide state-level insolvency frameworks, typically recognize the priority of perfected security interests. While employees’ wage claims are important and receive a degree of statutory preference, this preference is usually limited in scope and amount and does not typically override a prior, perfected security interest in the entirety of a company’s assets, especially when the secured debt significantly exceeds the value of the collateral. Therefore, the bank’s perfected security interest in all assets would generally take precedence over the employees’ wage claims in the distribution of the corporation’s assets.

In Alaska, when a corporation enters insolvency proceedings, particularly liquidation, the distribution of assets among creditors follows a strict statutory order of priority. This order is designed to balance the rights of various stakeholders, from secured lenders to unsecured creditors and employees. The Alaska Statutes, specifically Title 10 concerning Corporations and Business Associations, and potentially Title 34 concerning Property, conveyances, and encumbrances, along with federal bankruptcy law principles as interpreted by Alaskan courts, guide this hierarchy. Secured creditors, those with a valid lien on specific corporate assets, generally have the first claim to the proceeds from the sale of those assets. Following secured creditors, claims for administrative expenses incurred during the insolvency process itself are typically prioritized. Then come preferential claims, which in Alaska, as in many jurisdictions, often include certain employee wages and benefits earned within a specified period prior to insolvency, as well as certain tax liabilities owed to governmental entities. Unsecured creditors, those without collateral, stand next in line, sharing proportionally in any remaining assets. Finally, if any assets remain after all creditor claims are satisfied, they are distributed to the shareholders, typically in order of their share class. The question asks about the priority of a specific claim relative to others, requiring an understanding of this established pecking order. For instance, if a company owes wages to employees for the month preceding insolvency and also owes taxes to the State of Alaska for the same period, and there are also unsecured trade creditors, the statutory framework dictates the order in which these claims are satisfied from the company’s liquidated assets. The concept of “preferential claims” is key here, often encompassing both employee wages and certain governmental taxes, though their exact relative priority can depend on specific statutory wording and case law.

The scenario presented involves a company, “Aurora Borealis Enterprises,” incorporated in Alaska, facing severe financial distress. The core issue is the potential clawback of payments made to a supplier, “Glacier Goods,” within the ninety days preceding Aurora Borealis Enterprises’ voluntary petition for Chapter 7 bankruptcy. Under the United States Bankruptcy Code, specifically 11 U.S.C. § 547, these payments may be considered preferential transfers. A preferential transfer is a payment made by an insolvent debtor to a creditor on account of a pre-existing debt that enables the creditor to receive more than they would have received in a Chapter 7 bankruptcy. To qualify as a preference, several elements must be met: the transfer was made to or for the benefit of a creditor; on account of an antecedent debt; made while the debtor was insolvent; made on or within 90 days before the date of the filing of the petition; and that enabled such creditor to receive more than such creditor would receive under the provisions of this title. The question asks about the specific period for clawback of payments made to a non-insider creditor. For a non-insider creditor, the look-back period is indeed 90 days prior to the bankruptcy filing. Therefore, if Aurora Borealis Enterprises filed for bankruptcy on October 15, 2023, payments made to Glacier Goods on or after July 17, 2023, would be subject to potential clawback as preferential transfers, assuming all other elements of § 547 are met. The explanation focuses on the statutory period for non-insider preference clawbacks in the United States, which is directly applicable in Alaska as it operates under federal bankruptcy law. The calculation is simply identifying the date 90 days prior to the filing date. October 15, 2023 minus 90 days is July 17, 2023.

The core principle at play here is the concept of “disclaimer of onerous property” under the Insolvency and Bankruptcy Code, 2016 (IBC), which has parallels in Alaska’s approach to insolvency, although specific statutory language may differ. When a company enters insolvency, the liquidator or administrator has the power to disclaim property that is burdensome or from which no benefit can be derived. This is to prevent the insolvency estate from incurring further liabilities or costs associated with such property. In Alaska, as in many U.S. jurisdictions, a trustee or receiver has similar powers to abandon or disclaim property that is burdensome or has no equity for the estate. The scenario describes a commercial property leased by the insolvent entity, where the lease terms require significant ongoing payments for repairs and maintenance that exceed the rental income. This makes the lease an onerous contract. The liquidator, acting on behalf of the insolvent company and its creditors, would seek to disclaim this lease. The disclaimer effectively terminates the company’s obligations under the lease from the date of disclaimer. However, the landlord retains a claim for damages arising from the breach of the lease. This claim is treated as an unsecured claim against the insolvent estate, subject to the general priority rules for unsecured creditors. The landlord’s right to re-enter or forfeit the lease is typically suspended during the insolvency proceedings, but the disclaimer allows the liquidator to exit the lease without further liability beyond the damages claim. The calculation is conceptual: the net realizable value of the property for the estate is negative due to the ongoing repair costs exceeding rental income. Therefore, the optimal action for the liquidator is to disclaim the lease. The landlord’s claim for damages would be calculated based on the remaining term of the lease, the rent differential, and the costs the landlord would incur to re-lease the property, less any mitigation efforts. For the purpose of this question, we focus on the *action* of the liquidator and the *nature* of the landlord’s claim post-disclaimer, not a specific monetary calculation of damages.

The scenario involves a debtor in Alaska who has made a payment to a creditor within the ninety-day preference period prior to filing for bankruptcy. Under Alaska insolvency law, specifically referencing principles aligned with the U.S. Bankruptcy Code which Alaska largely follows for federal bankruptcy matters, a transfer of property made by an insolvent debtor to or for the benefit of a creditor, for or on account of a pre-existing debt, made while the debtor was insolvent, and which enables the creditor to receive more than they would have received in a Chapter 7 bankruptcy, may be considered a preferential transfer. The look-back period for ordinary unsecured creditors is typically 90 days before the bankruptcy filing. The purpose of these provisions is to ensure equitable distribution of the debtor’s assets among all creditors and to prevent debtors from favoring certain creditors over others in anticipation of insolvency. The trustee has the power to avoid or “claw back” such preferential payments. The calculation for determining if a payment is preferential involves assessing the debtor’s insolvency at the time of the transfer, the timing of the transfer (within the preference period), the nature of the transfer (for an antecedent debt), and the effect of the transfer (allowing the creditor to receive more than a pro rata share). In this case, the payment to the supplier of raw materials for an antecedent debt within the 90-day period, when the business was demonstrably struggling and likely insolvent, fits the criteria for a preferential transfer. Therefore, the trustee can seek to recover this payment.

The question probes the distinct legal frameworks governing corporate insolvency in Alaska, specifically contrasting the principles of a Chapter 7 liquidation with those of a Chapter 11 reorganization under the U.S. Bankruptcy Code. In a Chapter 7 liquidation, the primary objective is the orderly winding up of a business’s affairs. An appointed trustee liquidates the debtor’s assets, and the proceeds are distributed to creditors according to a statutory priority scheme. The business entity ceases to exist. Conversely, a Chapter 11 reorganization aims to allow a distressed business to continue operating while restructuring its debts and operations. This typically involves the debtor in possession (or a trustee) proposing a plan of reorganization that, upon confirmation by the court, binds creditors and allows the business to emerge from bankruptcy. The core difference lies in the outcome: cessation of business in Chapter 7 versus continuation of business in Chapter 11. The Alaska specific context is that these federal bankruptcy provisions preempt state insolvency laws when a business files for federal bankruptcy. Therefore, while Alaska has its own statutes for non-bankruptcy insolvency matters (e.g., assignments for the benefit of creditors), federal bankruptcy law dictates the process for formal insolvency proceedings involving corporations. The question requires understanding that Chapter 7 focuses on asset disposition and dissolution, whereas Chapter 11 prioritizes business continuity and debt restructuring.

The core issue in this scenario revolves around the application of Alaska’s insolvency statutes, specifically concerning the avoidance of preferential transfers. Alaska Statute 11.56.330 defines a fraudulent transfer, and while not directly applicable to preferential payments, it establishes a framework for understanding intent to defraud. More pertinent is the general insolvency principle, often codified in state law and influenced by federal bankruptcy principles, that allows for the recovery of payments made to creditors shortly before insolvency that unfairly benefit one creditor over others. While Alaska does not have a specific statute mirroring the Bankruptcy Code’s Section 547 for preferences, courts will look at the debtor’s financial condition at the time of the transfer and the effect of the transfer on other creditors. A payment made within a certain period before the commencement of insolvency proceedings (often 90 days, but this can vary and is subject to judicial interpretation if not statutorily defined) to an antecedent debt that enables the creditor to receive more than they would in a pro-rata distribution is generally considered a preference. In this case, the payment to Glacier Bank for a pre-existing loan, made when Aurora Inc. was demonstrably in financial distress and unable to pay all its creditors, constitutes a preference. The purpose of recovering such transfers is to ensure equitable distribution among all creditors, upholding a fundamental objective of insolvency law. The period of 90 days prior to insolvency is a common benchmark, and the payment to Glacier Bank falls within this timeframe. Therefore, the administrator would seek to recover the \( \$50,000 \) payment.

The scenario describes a situation where a corporation, “Arctic Ventures Inc.,” operating in Alaska, is facing severe financial distress. The core issue revolves around the concept of voidable transactions, specifically preferential payments, under Alaska insolvency law. Under Alaska Statute 11.56.370, a transfer of property by a debtor to a creditor for an antecedent debt is considered preferential if it is made within a certain period before the commencement of insolvency proceedings and enables the creditor to receive more than they would have received in a distribution under Alaska’s insolvency framework. The key elements to consider are the debtor’s insolvency at the time of the transfer, the transfer being for an antecedent debt, the transfer occurring within the statutory look-back period (typically 90 days for non-insider creditors and one year for insiders, though specific Alaska statutes might define this differently, for this example we will assume a 90-day period applies for non-insiders), and the effect of the transfer being to give the creditor a greater percentage of their debt than other creditors of the same class. In this case, Arctic Ventures Inc. made a payment of $50,000 to “Northern Supply Co.” on account of an overdue invoice of $75,000. The insolvency proceeding commenced 60 days after this payment. Assuming Northern Supply Co. is a general unsecured creditor and that other general unsecured creditors would receive only 30% of their claims in the subsequent insolvency proceeding, the payment of $50,000 to Northern Supply Co. would be considered preferential because it allows them to receive 100% of their debt (or at least a significant portion thereof that is disproportionately higher than what other creditors of the same class would receive) while other similar creditors would receive only 30%. The insolvency practitioner, acting on behalf of the estate, would seek to recover this preferential payment to ensure equitable distribution among all creditors. The amount to be recovered would be the amount of the preferential payment, which is $50,000. The purpose of recovering such payments is to restore assets to the insolvent estate that were improperly transferred, thereby maximizing the pool of assets available for distribution to all creditors in accordance with the established priorities under Alaska law, upholding the fundamental principle of pari passu distribution among creditors of the same class.

The core issue in this scenario revolves around the concept of “disclaimer of an unexpired lease” by a trustee in bankruptcy under federal bankruptcy law, which preempts state law in this context. Specifically, Section 365 of the U.S. Bankruptcy Code governs the assumption or rejection of executory contracts and unexpired leases. Alaska, like all U.S. states, operates under this federal framework for bankruptcy proceedings. When a trustee for a bankrupt entity, such as “Aurora Expeditions LLC,” decides to reject an unexpired lease, as they are permitted to do under § 365(a), this rejection is treated as a breach of the lease that occurs immediately before the filing of the bankruptcy petition. This breach gives the non-bankrupt party, in this case, “Glacier View Properties,” a claim for damages. However, § 365(d)(3) provides specific treatment for leases of nonresidential real property, requiring the trustee to timely perform all obligations of the debtor arising from and after the order for relief under that lease until such lease is assumed or rejected. If the trustee fails to perform these obligations, § 365(d)(3) does not automatically terminate the lease but allows the non-debtor party to seek appropriate relief. Crucially, § 365(g)(1) states that the rejection of an executory contract or unexpired lease constitutes a breach of the contract or lease. This breach is deemed to have occurred immediately before the date of the filing of the petition. The non-breaching party then has a claim for damages resulting from this breach. Under § 502(b)(6), claims for damages resulting from the termination of an employer’s lease of real property are capped. This cap limits the damages to the rent reserved by the lease, without acceleration, for the greater of one year or 15 percent, not to exceed three years, of the remaining term of the lease. The remaining term of the lease for Aurora Expeditions LLC is 18 months. Applying the 15% rule: \(0.15 \times 18 \text{ months} = 2.7 \text{ months}\). Since 2.7 months is less than one year, the greater of the two is one year. Therefore, Glacier View Properties’ claim is limited to the rent for one year. If the monthly rent is \( \$5,000 \), the total claim is \( 1 \text{ year} \times 12 \text{ months/year} \times \$5,000/\text{month} = \$60,000 \). The trustee’s rejection of the lease constitutes a breach, and Glacier View Properties is entitled to a claim for damages, subject to the statutory cap. The other options represent incorrect applications of the bankruptcy code provisions regarding lease rejection and damage claims.

The scenario describes a situation where a corporation in Alaska, facing significant financial distress, has made substantial payments to certain creditors within the ninety days preceding the commencement of insolvency proceedings. Specifically, the corporation paid \( \$50,000 \) to a supplier for goods received on credit more than sixty days prior, and \( \$75,000 \) to a bank to reduce an outstanding loan secured by a significant portion of the corporation’s assets. Alaska insolvency law, like federal bankruptcy law, scrutinizes transactions that may unfairly prejudice other creditors. Such payments, made when the debtor is unable to pay its debts as they become due, and which enable a creditor to receive more than they would in a distribution under the insolvency proceedings, are generally considered preferential transfers. The key elements for a preferential transfer under Alaska law, drawing from federal bankruptcy principles, typically include a transfer of the debtor’s interest in property, made to or for the benefit of a creditor, for or on account of an antecedent debt, made while the debtor was insolvent, and made within a certain period before the filing of the insolvency petition (the “look-back period”). The look-back period for general unsecured creditors is often ninety days, while for insiders, it can be extended. The purpose of avoiding preferential transfers is to ensure an equitable distribution of the debtor’s remaining assets among all creditors. The insolvency practitioner, in this case, would seek to recover these preferential payments to be included in the general pool of assets available for distribution to all creditors, thereby upholding the principle of pari passu (equal footing) for unsecured creditors as much as possible. The payment to the supplier for pre-existing debt, made within the look-back period while insolvent, is a classic example of a preference. Similarly, the payment to the bank, even if secured, could be scrutinized if it effectively reduces the secured creditor’s recovery beyond what they would have received through the normal course of the secured claim’s realization in insolvency, or if the payment was made for an antecedent debt beyond the normal payment terms for that debt and falls within the preference period. The question asks about the nature of these transactions. These are indeed preferential payments, as they are transfers made while insolvent, on account of antecedent debts, within the statutory look-back period, that allow certain creditors to receive more than they would in a pro-rata distribution.