> senior debt I don't know much about finance so for anyone else like me I'd like to point out that this is not a typo. > In finance, senior debt, frequently

> senior debt I don't know much about finance so for anyone else like me I'd like to point out that this is not a typo. > In finance, senior debt, frequently issued in the form of senior notes or referred to as senior loans, is debt that takes priority over other unsecured or otherwise more "junior" debt owed by the issuer. https://en.wikipedia.org/wiki/Senior_debt https://en.wikipedia.org/wiki/Senior_debt > What is 'Senior Debt' > Senior debt is borrowed money that a company must repay first if it goes out of business. Companies have a number of options for obtaining financing, including bank loans and the issuance of bonds and stocks. Each type of financing has a different priority level in being repaid if the company decides to liquidate. If the company goes under, the holders of each type of financing have different levels of rights to the company's assets. > If a company goes bankrupt, senior debtholders, who are often bondholders or banks that have issued revolving credit lines, are most likely to be repaid, followed by junior debt holders, preferred stock holders and common stock holders. Senior debt is secured by collateral, and that collateral can be sold to repay the senior debt holders. As such, senior debt is considered lower risk and carries a relatively low interest rate. Even though senior debtholders are the first in line to be repaid, they will not necessarily receive the full amount they are owed in a worst-case scenario. http://www.investopedia.com/terms/s/seniordebt.asp http://www.investopedia.com/terms/s/seniordebt.asp I'm sure there is more to this topic than what I've pasted above. Off the top of my head, I can imagine it is unlikely that the courts would just accept that a company going bankrupt got a super senior loan from the chairman's wife if there is no book keeping that the money actually went into the company and was not a ploy to defraud the actual lenders. I think any lender can take the debtor to court if they suspect malice (This is just my hunch.)