Reading comp PrepTest 156 · Section 1 · Question 21

Passage

 Traditionally, corporate bankruptcy law placed highest priority on the orderly discharge of debts; courts generally ordered failed businesses to pay Remaining source text redacted.
Passage walkthrough
Passage Summary

Topic:
Legal Studies

Paragraph 1

  • Paragraph note
    • Old Approach/New Approach; arguments for old
  • Views, minor Meta-Structures, and the author's attitude
    • Old Approach: Bankruptcy's focus is repayment of creditors
    • New Approach: Bankruptcy's focus is restructuring to keep company in business
    • Jackson (Old Approach): Focus should be on repaying creditors as much as possible


Paragraph 2

  • Paragraph note
    • Korobkin criticizes Jackson/Old Approach
  • Views, minor Meta-Structures, and the author's attitude
    • Korobkin: Old Approach fails to take other stakeholders into account (customers, employees, suppliers)
    • Korobkin: Old Approach prevents benefits of company


Paragraph 3

  • Paragraph note
    • Korobkin: Principles for New Approach
  • Views, minor Meta-Structures, and the author's attitude
    • Korobkin: New Approach fair and acceptable
    • Principle 1, Inclusion: all affected individuals taken into account
    • Principle 2, Rational Planning Salvage potential: "rank" those affected and take care of most affected first


Paragraph 4

  • Paragraph note
    • Author's opinion
  • Views, minor Meta-Structures, and the author's attitude
    • Author: Korobkin/New Approach more equitable
    • Author - Significant weaknesses of Korobkin/New Approach
      • Creditors are put at higher risk, so they charge more for credit
      • Doesn't tell us how to "rank" how badly different groups affected


Main Point:

While Korobkin's modern approach to bankruptcy is more equitable than Jackson's traditional approach, it has significant weaknesses.



Key Lines (P(aragraph) X, S(entence) Y)?

P1, S1 - Old Approach
P1, S2 - New Approach
P1, S3 - Argument for Old Approach
P2, S1 - Old Approach criticized
P3, S1 - New Approach benefits
P3, S2 - One principle of New Approach
P3, S3 - Second principle of New Approach
P4, S1 - Author's opinion of New Approach (and comparison to Old Approach)



Meta-Structure?

Old Approach/New Approach: The opening two sentences of this passage present a traditional and modern approach to bankruptcy law, setting this up as an Old Approach/New Approach passage. The rest of the passage discusses the benefits and criticisms of these approaches, meaning this Meta-Structure defines the passage. When a passage falls into this Meta-Structure, the author's opinion of the New Approach is generally the main point. Here, that opinion is most clearly stated in P4, S1: the New Approach is more equitable than the Old Approach, but it has some significant weaknesses. (See Last Thoughts? for a bit more on this.)



Last Thoughts?

Check the first sentence of Paragraph 4 again — it's a bit trickier than it might first appear, for two reasons. First, it compares the Old Approach and New Approach, but only on equity. The second part of the sentence claims that the New Approach has significant drawbacks, but it doesn't say that these drawbacks are more significant than the Old Approach's drawbacks. Which brings us to our second point: this passage can feel like a Resolving a Debate passage, but the author doesn't resolve the debate as to which of the two approaches is better. The author argues the New Approach is more equitable than the Old Approach but the New Approach also says it has downsides. The author never concludes whether we should go with the Old Approach, the new one, or a hybrid approach. As such, the main point of this passage is the author's opinion of the New Approach, not a recommendation or endorsement of one of the two approaches.

Question prompt

Which one of the Remaining source text redacted.
Why the credited answer is right

Credited answer: B

The notes below walk through why it fits the stem and how to eliminate the rest.

Question Type

Legal

Answer choices

  1. A
    a peace plan that Remaining source text redacted.
    Why choice A is not credited
    Neither of the priorities of the principle of rational planning required balance between two sides. In fact, the last sentence "ranks" the priority of different parties, which suggests a lack of balance!
  2. B
    an emergency management plan Remaining source text redacted.
    Why choice B matches the stem

    Question Type:
    Principle (Must Be True)

    Strategy Overview:
    Review the moral priorities that are a part of the noted principle, then find an answer that aligns with them

    Answer Anticipation/Relevant Lines:
    In this question, we're asked to take a principle from the passage and then find an answer that aligns with it. When the passage provides the principle, we're dealing with a Principle (Must Be True) question. On these questions, we clearly define the principle, then use it to analyze the answers.

    This question stem points us directly to where we need to focus our attention — the last two sentences of P3. Looking there, we see that each sentence provides a separate aspect of the principle ("also mandates"):

    1. P3, S3 - Consider each party's interests in the context of whether a plan can salvage a company's potential
    2. P3, S4 - Protect those who will suffer the greatest financial distress first

    Let's use these principles/moral priorities to find an answer.

    Answer Choice Explanation:
    The final sentence of P3 involved "triaging" the financial claims of those affected by bankruptcy, focusing on those suffering the most harm first. This answer has an analogous situation, where those who are most injured are treated first. This answer thus conforms to that principle, so it's the correct answer.

    Key Takeaway:
    When the passage gives you the principles on a Principle question, treat it as a Principle (Must Be True) question. Clearly lay out the principles, then find the answer that lines up with them.

  3. C
    an investment strategy that Remaining source text redacted.
    Why choice C is not credited
    Similar to (A), there's no suggestion of balancing various considerations, and there is a suggestion to rank some things as more important than others, so this answer is incorrect.
  4. D
    a taxation policy that Remaining source text redacted.
    Why choice D is not credited
    This answer doesn't feature the salvaging of potential, so it doesn't line up with the first part of the principle. And it doesn't necessarily involve "triaging" the importance of different things — just determining which things should be taxed — so it doesn't line up with the second.
  5. E
    a public-health initiative that Remaining source text redacted.
    Why choice E is not credited
    This answer might seem tempting! It sounds like it conforms with the second part of the principle that involved "ranking" who was more and less affected by the bankruptcy. However, in that case, all of the relevant parties were affected. In this case, the public-health initiative is trying to prevent people from being affected. This answer might be correct if Korobkin's principles involved trying to prevent bankruptcies rather than treating various affected individuals during/after bankruptcy.

What this tests

Question analytics

Based on historical answer selection rates for this question.

Answer choice distribution

  1. A 7%
  2. B Credited 80%
  3. C 8%
  4. D 4%
  5. E 1%

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