Question: Siouxsie & Banshees, Inc. has 100 shareholders, each holding one share, and the following creditors: a $10 million secured bank loan, $400,000 owed to various

Siouxsie & Banshees, Inc. has 100 shareholders, each holding one share, and the following creditors: a $10 million secured bank loan, $400,000 owed to various trade creditors, $500,000 owed to unsecured bondholders, and $300,000 owed on a tort judgment. If its assets equal $11 million, who gets what on liquidation? Would you expect the bank loan or the unsecured bonds to have the higher interest rate? What about the trade creditors and the tort judgment?

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