The Friendly Money Making Board

[bdahl385]

When a publicly traded company fails, the common stock holders are always last on the pecking order when trying to pick up some of the company assets. Since the company probably failed due to poor financial shape, what little is left goes to the debt holders (bonds) and preferred stockholders first.

Similar to the fact the 2nd and 3rd lien holders on a home mortgage gets wiped out when the primary lien holder forecloses on the property. That's why those 2nd's and Home Equity loans always are more costly for the borrower than the primary mortgage... Higher risk, higher interest rates...