Bankruptcy law defines the priority of creditors' claims when the firm is liquidated.

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Bankruptcy law does indeed define the priority of creditors' claims when a firm is liquidated. This means that some creditors may have a higher priority than others when it comes to receiving payments from the assets of the firm. For example, secured creditors may have first priority, followed by unsecured creditors, and finally shareholders. This priority system is designed to ensure that creditors have some assurance of receiving at least some of the money owed to them in the event of a firm's bankruptcy.

Bankruptcy Law Defines the Priority of Creditors' Claims When the Firm