meaning of ABSOLUTE PRIORITY RULE

ABSOLUTE PRIORITY RULE meaning in Law Dictionary

appropriate idea suggesting that when a public company DEFAULTS, investors are just eligible for recuperate their particular assets after lenders being totally repaid. In many BANKRUPTCY instances shareholders get little, if any, restitution because they are subordinate to all or any various other claimholders. Absolute priority also also includes the broad group of creditors, in which secured lenders get payment before senior unsecured creditors, whom obtain repayment before junior and subordinated creditors. See in addition SUBORDINATION.