What will be the payouts to each class of claimant

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Reference no: EM131881327

Perry’s Pass-U Corp. is in severe financial distress. The company has first-lien debt outstanding with a claim of $500 million, a second-lien debt outstanding with a claim of $200M, unsecured debt with a claim of $600 million. They also have preferred stock in the capital structure with a claim of $200 million and common stock. A liquidation valuation of the company’s assets shows that PPU has only $600 million of assets, $500 million of which is fixed assets (pledged as collateral to both the first-lien and the second lien debt) and $100 million of other assets. The second-lien is subordinated to the first-lien in its claim to any collateral. In liquidation, what will be the payouts to each class of claimant (the first-liens, the second-liens, the unsecured debt, the preferred stock and the common stock).

Reference no: EM131881327

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