Markets · 6 pages · 12 min

How absolute priority orders the line

Absolute priority orders payment so that senior claims are satisfied before junior claims receive a distribution.

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From the opening

Absolute priority is the rule that orders claimants in a line, with senior claims entitled to be satisfied before junior claims take a distribution. It is a sequencing rule for scarce value, not a statement about who deserves sympathy. The opening covers senior claims stand ahead, collateral feeds secured claims, and consent can permit a departure.

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Inside

Senior claims stand ahead
Collateral feeds secured claims
Consent can permit a departure
New case funding can step ahead
Where the idea stops applying
A distinction worth keeping

Sources

Absolute priority rule
Claims classification in reorganization

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How absolute priority orders the line

From the opening

Inside

Sources

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