Which one of the following will generally receive the highest priority in a bankruptcy liquidation,assuming the absolute priority rule is followed?
A)employee wages
B)bankruptcy administrative expenses
C)claims by unsecured creditors
D)contributions to employee superannuation plans
E)government tax claims

Question

Quizplus · Accepted Answer

The absolute priority rule in bankruptcy liquidation states that claims must be paid in order of priority, with secured claims being paid first, then bankruptcy administrative expenses, then unsecured claims, followed by equity and ownership interests. Therefore, choice B, bankruptcy administrative expenses, would generally receive the highest priority in a bankruptcy liquidation.

Which One of the Following Will Generally Receive the Highest