4 ms·
No, in the US, claims are paid out based on the type of debt, outlined in the Absolute Priority Rule.
by kube-system 3y ago
No, in the US, claims are paid out based on the type of debt, outlined in the Absolute Priority Rule.
- loeg 3y agoWe are talking about the same concept but with different terminology. Not "No, ...".
- kube-system 3y agoMaybe we are, but I'm not really sure 'seniority' is a great word to describe it. The term usually implies ranking due to duration. But it's really just a ranking prescribed by law. Often the shortest term lenders who are facilitating the bankruptcy process are first!
- AlbertCory 3y ago"senior" is a term of art, and entirely appropriate: https://www.investopedia.com/terms/s/seniordebt.asp https://www.investopedia.com/terms/s/seniordebt.asp
- kube-system 3y agoI stand corrected, thanks.
- nradov 3y agoExcept when it's politically advantageous to change the rules. During the GM bankruptcy and bailout in 2009, President Obama gave his supporters in the UAW a sweetheart deal which allowed them to recover more than the other unsecured creditors. This set a terrible precedent and undermined the rule of law.