Which of the following statements is FALSE?
1) Legal bankruptcy occurs when the firm or creditors bring petitions to a federal court for bankruptcy.
2) Bankruptcy refers to the legal proceeding for liquidating or reorganizing a business.
3) Technical insolvency occurs when a firm has a negative net worth, because the book value of its liabilities are less than the book value of its assets.
4) Liquidation is the termination of the firm as a going concern, whereas reorganization is the financial restructuring of a struggling firm to attempt to continue operations as a going concern.
