Bondholders are creditors, therefore they have a claim on the firm's assets that must be satisfied before any claims of stockholders in the event of the firm's bankruptcy, reorganization, or liquidation.

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Bondholders hold debt securities and are considered creditors of the company. In the event of bankruptcy, reorganization, or liquidation, their claims on the firm's assets have a higher priority than those of stockholders. Stockholders are residual owners of the company and their claims come after all of the company's creditors have been satisfied.

Bondholders Are Creditors, Therefore They Have a Claim on the Firm's