absolute priority rule

absolute priority rule
absolute priority rule n: a rule that provides for the satisfaction in full of claims of senior creditors before any payments can be made to junior creditors under a chapter 11 bankruptcy plan

Merriam-Webster’s Dictionary of Law. . 1996.

absolute priority rule
The principle of bankruptcy law requiring the claims of a dissenting class of creditors must be paid in full before any class of creditors junior to such dissenting class may receive or retain any property in satisfaction of their claims.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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