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The order of repayment. In the event of bankruptcy, senior debt must be repaid before subordinated debt is repaid.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Absolute Priority

A rule stating that, in liquidation, certain creditors must be satisfied in full before any other creditors receive any payments. That is, in the liquidation of a company, the absolute priority rule states that holders of secured debt must be paid before holders of unsecured debt. Holders of unsecured debt have precedence over preferred shareholders, and, finally, preferred shareholders must be satisfied before common shareholders.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The condition or status of a security that has priority over other securities by the same issuer with respect to the payment of income (that is, interest or dividends) and repayment of principal. As an example, for the same issuer, bonds have seniority over preferred stock and preferred stock has priority over common stock. See also junior security.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
In the case of men, according to the seniority system, there are three peaks, while for women there is no system at all.
In fact, if our seniority system does not allow new entries into the trade show, it is possible that lawsuits could be brought against our show (and other shows) because of a perception of restraint-of-trade activities.
None of these women would have been demoted if the plant-wide seniority system had been applicable.
But in the Barnett case, the Court held that employers are entitled to a rebuttable presumption that an accommodation is unreasonable when it violates a bona fide seniority system for job assignments.
Under the company's seniority system, he claimed a physically less demanding job in the mailroom.
Kuroyanagi, former vice president of Chubu Electric Power Co., said the NSE's current pay schedule is an example of Japan's bad seniority system.
Commenting on COMO (the women's organization in Juarez), Cowie argues: "While COMO struggled to raise the collective consci ousness of the young Juarez workers, RCA and other maquilas sought to keep turnover high enough to prevent the maturation of their employees' attitudes towards their jobs," especially through the seniority system. (160) While there may well be some truth in this argument, it ignores the ever-more important issue of production quality for capitalist globalization.
Under the commensurate seniority system endorsed by the National Joint Pitch Council, the firm is No 1 at Leicester, Stratford and Wolverhampton; No 2 at Hereford, Southwell, Uttoxeter, Warwick and Worcester; No 3 at Ludlow; No 4 at Cheltenham; and No 5 at Nottingham.
Union contracts mandate an assembly line-style seniority system, whereby teachers are hired and promoted regardless of performance.
Supplementary field interviews document the resistance of senior workers who fear failure at new jobs and loss of the seniority system, the concern of long-tenured managers and foremen about their roles in participatory work environments, and the difficulties faced by union and management in building new relations and overcoming low levels of trust.
And who, under Arkansas' seniority system, became speaker-designate because most other senior members had already been speaker.
Charles Rangel challenge the House seniority system to land a coveted position of power?