Ownership Rights and Liquidation Priority

What this video covers

• The absolute priority rule and its five-level liquidation order: secured creditors, unsecured creditors, subordinated debenture holders, preferred stockholders, then common stockholders
• Why debt always comes before equity in bankruptcy, regardless of how "special" the stock appears
• How limited liability caps a shareholder's loss at their initial investment and why creditors cannot touch personal assets
• The trade-offs between common stock voting rights, unlimited upside, and residual claim status versus preferred stock's fixed dividend and higher liquidation priority
• Why preferred stockholders rank above common stockholders but still below every class of debt holder
• The exam trap answer suggesting shareholders owe corporate debts personally, and why that choice is always wrong
• Why common stockholders typically receive zero in bankruptcy because assets rarely cover all prior creditor claims