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Definition

A person or company who lends money without the security of a lien (over movable assets) or mortgage (over fixed property). Unsecured creditors can be either senior or junior. During liquidation the liquidators will sell the assets of the company and pay out the secured creditors first. After that they will pay out the senior unsecured creditors and then the junior or mezzanine creditors. Whatever is left is then used to pay out first the preferred shareholders and finally the ordinary shareholders..

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