6.7 Preferential Payments

The distribution ladder in liquidation (the priority map): (1) the liquidation costs (the process's own price); (2) the secured creditors (the charge-holders — to their security's value; the fixed- charge priority over the floating in the classical order); (3) the preferential debts (the statutory list: the employees' wages and dues; the tax/revenue dues' statutory face — the Act's preference ladder); (4) the unsecured creditors (the pari passu pool — the great class, sharing rateably); (5) the subordinated debt (the agreed queues); (6) the members — last, the surplus divided by their rights (equity after preference). The map's lesson: security ranks, statute prefers, andthe members stand at the end — the risk's architecture that explains everything from debentures' pricing to the equity's courage.