Absolute Priority Rule - The absolute priority rule kicks into play on the stock market when an event occurs that forces a business into a liquidation or re-organization.
absolute priority rule investment & finance definition
A legal concept used in bankruptcy proceedings that says that creditors' claims are given priority over shareholders' claims if a company is liquidated or reorganized.
Absolute Priority
Investment Dictionary:
Absolute Priority
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Definition
Absolute Priority Rule
A bankruptcy rule that allows for senior creditors to be paid completely before any junior creditors or stockholders collect payments.
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The absolute priority rule provides some degree of protection to vendors and other types of institutions that extend credit for goods and services to individuals and businesses.
Absolute Priority
A rule that stipulates the order of payment - creditors before shareholders - in the event of liquidation.
Absolute priority
Rule in bankruptcy proceedings requiring senior creditors to be paid in full before junior creditors receive any payment.
Rule of Absolute Priority
A condition of bankruptcy proceedings under which junior (subordinated) claim holders can receive no payment until senior (priority) claim holders are paid in full.
[FDIC] absolute priority Rule in bankruptcy proceedings whereby senior creditors are required to be paid in full before junior creditors receive any payment. [Harvey] absolute title A clear title that is free of any liens or judgments.
absolute priority rule The absolute priority rule specifies the peeking order of creditors during bankruptcy... absorbed The term is applied in financial context similarly to its laymen use1 When business...
This is particularly relevant in liquidation analysis, since using absolute priority in a bankruptcy all securities senior to the equity have par claims.
 See also: Share, Shareholder, Stock, Creditor, Investment
  
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