The absolute priority rule establishes the order in which:
A) Claims are paid in a bankruptcy proceeding.
B) Firms are liquidated by the bankruptcy courts.
C) Reorganization events must occur.
D) Bankruptcy cases are heard by the courts.
E) Judges are assigned to bankruptcy cases.

Question

Quizplus · Accepted Answer

The absolute priority rule is a principle in bankruptcy law that dictates the order in which claims are paid out during a bankruptcy proceeding, ensuring that senior creditors are paid before junior creditors.

The Absolute Priority Rule Establishes the Order in Which