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Liquidation preference, in its broadest sense, determines who gets how much when a company is liquidated, sold, or goes bankrupt. The typical liquidation order is
Liquidation preference, in its broadest sense, determines who gets how much when a company is liquidated, sold, or goes bankrupt. The typical liquidation order is as follows:
a. Bondholders > Common Shareholders > Preferred Shareholders
b. Bondholders > Preferred Shareholders > Common Shareholders
c. Preferred Shareholders > Bondholders > Common Shareholders
d. Common Shareholders > Preferred Shareholders > Bondholders
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