Series 79: Impaired Creditor

Taken from our FINRA Investment Banking Exam

Definition of the term Impaired Creditor...

in a bankruptcy, a creditor that does not stand to be repaid in full. In a Chapter 11 bankruptcy, these creditors vote on the reorganization plan if the plan will result in partial repayment. But impaired creditors who stand to receive nothing under the plan are assumed to reject it.

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