PDSnet Glossary

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Definition

<p style="text-align: justify;"><span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">Debt</span> in a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span> which ranks below <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">senior debt</span>, but above <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">equity</span> in the distribution of net <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">assets</span> on <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">liquidation</span>. On liquidation the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">liquidator</span>s first sell the assets of the company and then pay out the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">secured creditor</span>s. Other unsecured creditors (among whom would be mezzanine creditors) follow, and then once they are paid, if there are still funds left over they are given to the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">shareholder</span>s in proportion to their holdings.</p>