Chapter 7

What Does It Mean?
What Does Chapter 7 Mean?
A bankruptcy proceeding in which a company stops all operations and goes completely out of business. A trustee is appointed to liquidate (sell) the company's assets, and the money is used to pay off debt.
Investopedia Says
Investopedia explains Chapter 7
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 asset of the company. Next in line are the unsecured creditors, and then the investors. This phenomenon is known as "absolute priority".
Related Links
Rate this Term: Your Rating:    Overall Rating: Vote Now!
Sponsored Links
MARKETPLACE
The Investopedia Guide to Wall Speak
TRADING CENTER
CURRENT HIGH YIELD SAVINGS RATES
Type
Overnight avgs
Rate data provided by
Bankrate.com
add investopedia foot
www.investopedia.com