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Bankruptcy
Bankruptcy
Image 1 When a person or firm is unable to repay debts. Thus, the ownership of the firm's assets are transferred from the stockholders to the bondholders.
Image 2 Shareholders are the last people to get paid if a company goes under, creditors always get first grabs at proceeds from liquidation.


Absolute Priority

Bankruptcy Risk

Bond

Chapter 11

Discharge in Bankruptcy

Senior Security

Stockholders Equity