Final answer:
Indiana Manufacturing Corp. is a secured creditor with a purchase money security interest in the CAD machine and would likely recover the full $150,000 value of the collateral from the bankruptcy estate. Since their claim is fully satisfied by this amount, they would not receive further distributions from the remaining estate.
Step-by-step explanation:
If XYZ Corporation has filed for Chapter 7 bankruptcy and Indiana Manufacturing Corp. had a purchase money security interest in a CAD machine worth $150,000, Indiana Manufacturing is considered a secured creditor. Secured creditors are typically paid first from the proceeds of the sale of the collateral securing their debt. Since the CAD machine is valued at $150,000 in the bankruptcy, Indiana Manufacturing Corp. will likely recover this full amount because their claim is secured by the collateral.
After the secured claims are paid, the remaining assets in the bankruptcy estate are distributed to unsecured creditors, which in this case amounts to $400,000. However, the remaining value of the bankruptcy estate after paying Indiana Manufacturing Corp. is $400,000 (total estate of $550,000 minus the CAD machine value of $150,000). Thus, the unsecured creditors would have to share this amount pro-rata since none of them have priority over others. Indiana Manufacturing Corp. will not receive any additional distribution from the remaining estate because their claim is fully satisfied by the recovery of the secured asset.