Bondholders can force a company into bankruptcy if the company does not pay the interest as promised and,in the case of bankruptcy,bondholders have a priority claim on an issuer's income over that of a shareholder.

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Bondholders have a legal right to force a company into bankruptcy if the company fails to pay interest as promised. In case of bankruptcy, bondholders have a higher priority claim on an issuer's income compared to shareholders.

Bondholders Can Force a Company into Bankruptcy If the Company