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The order of repayment. In the event of bankruptcy, senior debt must be repaid before subordinated debt is repaid.

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.


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.
References in periodicals archive ?
A case was still pending in the Supreme Court regarding the violation of seniority in filling the slot.
Justice Asif Saeed Khosa, a member of the bench, remarked that if there is a statuary intervention then convention disappears, adding that seniority of a judge is always counted from the date of his permanent appointment.
Haroon Aslam, who is the top general on the seniority list at present and also has all that it takes to lead the Pakistan Army.
The Committee will prepare a cadre-wise single and unified provisional seniority within 15 days and seek objections, if any, from the individual employee in next 15 days, before finalizing the same.
Flight instructors from AirTran, who do not currently have union representation, have now been integrated into the master TWU 557 seniority list.
It has been observed that answers given for job knowledge, ability of written and oral communication, effort to improve and renew him/herself do not show a significant difference in terms of professional seniority.
In the overwhelming majority of school-district collective bargaining agreements, "last in, first out" provisions make seniority the determining factor in which teachers are laid off.
Her South Eugene position may be offered to an elementary school music teacher whose job was lost due to staffing changes, and who has more seniority than McConnell, according to district officials.
House of Representatives have served, with darker shades representing longer seniority.
This year, with so many teaching positions on the line, a strong national effort has been mounted to eliminate seniority rules (also known as "last in-first out" or LIFO rules) that govern teacher layoffs.
Empirical analysis reflects what is hard-wired into collective bargaining agreements (CBAs): seniority is the most important factor when deciding which teachers are laid off.
The present article contributes to our understanding of these issues, but its primary objective was to use data on faculty mobility to provide insights on another issue: returns to academic seniority.