In liquidations, the ________ generally holds, but in reorganizations under Chapter 11, it is often violated.

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The absolute priority rule generally holds in liquidations, which states that creditors must be paid off in order of seniority before equity holders can receive any proceeds. However, in reorganizations under Chapter 11, this rule is often violated as part of the restructuring process, where equity holders may be able to retain some ownership in the company, despite not being paid off in full.

In Liquidations, the ________ Generally Holds, but in Reorganizations Under