Series 65: 2.1.1.4 Right To A Residual Claim During Liquidation

2.1.1.4  Right to a Residual Claim During Liquidation

If a company is forced to liquidate due to bankruptcy, common stockholders have a residual claim to corporate earnings after all debt obligations have been satisfied. This means that common stockholders are at the bottom of the list of claims on the corporation. They are paid only after bondholders and preferred stockholders have been paid.