ABSOLUTE-PRIORITY RULE
absolute-priority rule.Bankruptcy. The rule that a confirmable reorganization plan must
provide for full payment to a class of dissenting unsecured creditors before a junior class of
claimants will be allowed to receive or retain anything under the plan. • Some jurisdictions
recognize an exception to this rule when a junior class member, usu. a partner or shareholder of
the debtor, contributes new capital in exchange for an interest in the debtor. 11 USCA §
1129(b)(2)(B)(ii). [Cases: Bankruptcy 3561. C.J.S. Bankruptcy § 395.] [Blacks Law 8th]