Negative liquidity events for Hans reading 9

CFAI Book Reading 9- EOC question #4- Hans gets sued- the answer in the book says to use cash for attorney, then perhaps sell shares of IngerMarine, and then perhaps take a loan against the house. Is this answer a matter of preference or a matter of liquidity? Like use your liquid assets first and then go down the line? Wasn’t sure. Also, I said in my answer that he should look for additional employment opportunities to cover the lawsuit expense, but that wasn’t in the answer, but I think that’s fairly reasonable if he needs the cash and isn’t actively working at Inger Marine.

Would your lawyer be willing to take an IOU from you - when you tell him - I am broke right now, but am searching for a job - and will pay you when I find one? The lawyer himself would say liquidate your assets and pay me, otherwise I am walking out.

Additionally - if a credit check / etc. were done on Hans - especially after he has been sued - wouldn’t that also show up - making getting a job less likely?