It's the debt holders.

It couldn't pay it's debt holders.

Well, it's the debt holders get first dibs.

But that's the view from the debt holders' point of view.

So let's say these are debt holders right here.

There might be different debt holders who have different

And we learned that the debt holders were actually more senior to the equity holders.

And essentially, the debt holders become the new shareholders of the company.

And if there wasn't enough money to pay all of the debt holders, then the equity holders got nothing.

You'd have to pay the debt holders, you'd have to pay off the debt first.

So some of the cash will go to the debt holders as interest.

And if we're the debt holders, and let's say it goes into bankruptcy.

Because the debt holders, all they were getting their upside was just interest, right?

And of course, the first 6 million of the value so the 4 million of debt, and then 2 million of the equity will go to the debt holders, right?

And the equity's 1 million, because there's no debt, so all of the assets are held by the equity holders.

Three pen holders.

And the equity holders get wiped out, the old equity holders.

Equity holders, they kind of took a gamble.

But this is debt. 80 million of debt right here.

And even within the debt, you'll have different layers of debt.

In the last video we talked about the scenario where a company, for whatever reason, it just couldn't pay it's debt holders.

I am free of debt.

The backbone of making investment decisions for global holders of capital.

It would penalize the equity holders.

And pays off the liability holders.

I mean, they're just place holders.

And the company can only handle 2 million of debt, not 6 million of debt.

So anyway, just going back on the different tranches of debt, or buckets of debt.

What debt?

Gambling debt?

And then we have the debt, the debt of the company, or the

He demanded payment of the debt.

Fortunately, he was free of debt.

We have a lot of debt.

So he borrows 100,000 of debt.

That's 2,000 of debt a year.

It had 5 million of debt.

Debt could be one of them.

So the equity holders are actually the owners of the company.

While many loudly thought of themself being the World Cup holders of tomorrow,

My friend got rid of his debt.

The value of this debt is 100,000.

We strike debt!

Covenants are pretty much a bunch of rules that the debt holders say, look, you're good, but if any of these x, y, or z things happen, we can take you into bankruptcy.

And also, a lot of the equity holders are the management of the company.