the event of bankruptcy under the federal bankruptcy laws, debtholders have a prior claim to a firm's income and assets before both common and preferred stockholders Moreover, in a bankruptcy all debtholders are treated equally as a single class of claimants.

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In bankruptcy, debtholders are not treated equally as a single class; they are divided into secured and unsecured creditors, with secured creditors having priority over unsecured creditors.

The Event of Bankruptcy Under the Federal Bankruptcy Laws, Debtholders