Absolute Priority
The principle in bankruptcy proceedings that requires senior creditors to be fully paid before junior creditors and stockholders may receive any payment.
Also known as "liquidation preference". Investopedia Says:
In other words, absolute priority specifies the pecking order. Senior creditors always get first grabs at the proceeds from liquidation. And, shareholders are the last people to get paid if a company goes under. Related Terms:
Bankruptcy
Chapter 11
Chapter 7
Distressed Securities
Prepackaged Bankruptcy
Second Lien Debt
Senior Issue
Senior Security |