easy · Private Credit & Debt documentation-covenants-terms
A Second Lien lender has a $50 million claim. The collateral is sold for $40 million.
What happens to the remaining $10 million of the Second Lien claim?
- It is automatically cancelled
- It becomes a general unsecured claim
- It is converted into Preferred Equity
- It maintains its priority over First Lien debt
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