In the event of bankruptcy,debtholders have a prior or first claim to a firm's income and assets over the claims of both common and preferred stockholders.However,in bankruptcy all debtholders are treated equally as a single class of claimants.

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In bankruptcy, debtholders are prioritized over equity holders (common and preferred stockholders), but not all debtholders are treated equally. They are ranked based on the seniority of their claims, with secured creditors typically being paid before unsecured creditors.

In the Event of Bankruptcy,debtholders Have a Prior or First