Chapter 7: Bankruptcy Liquidation

Curated and Reviewed by Lesson Planet

The first of two videos on bankruptcy, Sal explains the liquidation process and effects on investors. He reviews ways a company raises capital and presents a hypothetical issue: a company goes bankrupt and doesn't have the assets it originally had assumed. Scholars consider the issue of asset allocation: Who gets the money? Using a balance sheet to illustrate the concepts, he explains the debt-holders' hierarchy. Sal outlines the debt bucket system from senior secured debt to subordinated unsecured debt.

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Concepts

bankruptcy, equity

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Additional Tags

senior secured debt, debt bucket system, equity, bankruptcy, asset allocation, liquidation, social studies

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Resource Details

Grade

11th - Higher Ed

Subjects

Social Studies & History