The idea that creditors' claims take precedence over shareholders' claims in the event of a liquidation or reorganization. Shareholders are compensated only after creditors have been fully paid off.
Related information about absolute priority rule:
- Absolute Priority Definition | Investopedia
The absolute priority rule is used in bankruptcies to decide what portion of payment will be received by which participants. Debts to creditors will be paid first and ...
- What is the Absolute Priority Rule?
First, a word of warning: the absolute priority rule only applies in Chapter 11 bankruptcy cases and so has little consequence for the average consumer debtor .
- Jones Day | Application of the Absolute Priority Rule to Pre-Chapter ...
"Give ups" by senior classes of creditors to achieve confirmation of a plan have become an increasingly common feature of the chapter 11 process, ...
- The Absolute Priority Rule: An Endangered ... - Bryan Cave LLP
Apr 9, 2012 ... This Client Alert is published for the clients and friends of Bryan Cave LLP. Information contained herein is not to be considered as legal advice.
- Absolute Priority Rule Law & Legal Definition
The absolute priority rule is a rule which insists that a creditor's claim have an absolute priority over a shareholder's claim. This rule is invoked during the ...
- No 'absolute priority' rule after BAPCPA, federal judge says
Oct 14, 2011 ... The “absolute priority” rule no longer applies to individual Chapter 11 debtors since the passage of the Bankruptcy Abuse Prevention and ...
- Absolute Priority Rule - Financial Dictionary - The Free Dictionary
A rule stating that, in liquidation, certain creditors must be satisfied in full before any other creditors receive any payments. That is, in the liquidation of a company ...
- Does the Absolute Priority Rule Still Apply to Individual Chapter 11 ...
Jun 29, 2012 ... Section 1129(b)(1) of the Bankruptcy Code codifies a principle known as the “ absolute priority rule.” The absolute priority rule requires that ...