What is the so-called Deep State? Here's what you need to know about an obscure term making the rounds in the White House President Trump's Allies Keep Talking About the 'Deep State.'
The investors who take the least risk are paid first. For example, secured creditors take less risk because the credit that they extend is usually backed by collateral, such as a mortgage or other assets of the company. They know they will get paid first if the company declares bankruptcy. Secured Creditors-often a bank, is paid first. 2  Unsecured Creditors-such as banks, suppliers, and bondholders, have the next claim. 3  Stockholders-owners of the company, have the last claim on assets and may not receive anything if the Secured and Unsecured Creditors' claims are not fully repaid.
When a company goes bankrupt, it sells off its remaining assets to pay off as much of its debts as possible. In the eyes of bankruptcy law, not all debts are equal in priority.The bankrupt company must pay off its creditors and shareholders according to an order set by federal laws.his is one of the reasons why stocks are a riskier investment than bonds. When a company declares bankruptcy, its stock becomes worthless. The shareholders only get money after all other debts are paid. Since the company was in bad enough shape to declare bankruptcy, this isn't especially likely.