What Is the Absolute Priority Rule of the Following Claims

question 12

Multiple Choice

What is the absolute priority rule of the following claims once a corporation is determined to be bankrupt?

• A)Administrative expenses, wages claims, government tax claims, debtholder and then Equityholder claims.
• B)Administrative expenses, wages claims, government tax claims, equityholder and then Debtholder claims.
• C)Wage claims, administrative expenses, debtholder claims, government tax claims and Equityholder claims.
• D)Wage claims, administrative expenses, debtholder claims, equityholder claims and Government tax claims.
• E)None of the above.

---

Definitions:

Specialty Product

A product that is characterized by its unique attributes, high level of quality, or brand identity, often leading consumers to put forth a significant effort in purchasing it.

Supplies

Materials or items used in the operation of a business or needed to provide services.

Unsought Product

Products that consumers do not actively seek out to buy, and may purchase only out of necessity or unforeseen need, such as emergency services or life insurance.

Shopping Products

Goods for which consumers will spend time and effort to compare quality, price, and perhaps style between different sellers before making a purchase.