Financial Turnarounds: Preserving Value

Appendix B. Glossary

Absolute Priority Rule.

A rule under Chapter 11 that all senior claimants must be satisfied completely before more junior claimants receive anything.

Anticipation Payments.

The practice of offering customers discounts for immediate payment.

Bankruptcy.

A situation in which an individual or institution becomes insolvent and can no longer pay debts owed. Under U.S. law, there is involuntary and voluntary bankruptcy. In an involuntary bankruptcy, the court is petitioned by one or more creditors to have a debtor deemed insolvent. In a voluntary bankruptcy, the debtor petitions the court.

Chapter 11.

An integrated business reorganization statute enacted under the Bankruptcy Reform Act of 1978 that grants to the debtor and creditors the ...