easy · Private Equity advanced-lbo

Which of the following describes the 'Absolute Priority Rule' in a formal restructuring process?

1. Senior claims must be paid in full before junior classes receive any value
2. Bank lenders must accept lower returns than junior bondholders receive
3. Every creditor class must receive at least fifty cents on every dollar owed
4. Equity holders retain the right to veto any proposed debt repayment plan the debtor files

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