Who ranks higher in creditor hierarchy during bankruptcy?

During bankruptcy proceedings, the order of payment to creditors is crucially determined by the hierarchy of claims on a company's assets. Bondholders rank higher than common stockholders, preferred stockholders, and debenture holders in this hierarchy.

Bondholders are considered debt holders with a claim to the company's assets and income before other types of security holders. They are typically secured or unsecured creditors, depending on the specifics of the bond issue. In the case of bankruptcy, their claims are prioritized over equity holders, which includes common and preferred stockholders who face a higher risk of losing their investment.

Debenture holders, while also a form of debt, could be senior to other forms of securities depending on the terms laid out in the debt agreement, but generally speaking, they are not regarded as a higher tier compared to bondholders. Thus, bondholders indeed take precedence in receiving repayments from the company's remaining assets during bankruptcy proceedings, affirming their critical role in the creditor hierarchy.