Dear Sir,
1. A public limited company issued the securities as follow:
a. Secured Dentures
b. Unsecured Debentures
c. Preferance Shares &
d. Equity Shares.
2. At the time of liquidation, who will be giving the priority to settle the debt after settlement to Creditors?.
Kindly explain
Thank you.
With regards,
R. Marimuthu
After the settlement of creditors, you settle secured debentures and then unsecured. Since, shareholders have a claim over ONLY the residual part of the company. So even after the settlement of debentures, the primary claim is of the preference shareholders and at last the equity shareholders.
Hope it helped.
Let me know if there are any further queries :)
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