Hi it has been a few years since my last CFA exam … I recall something like a “share the pain” principle in corporate bankruptcy and/or restructurings. The idea is that even though in theory the absolute priority rule states that senior creditors shouldn’t take any losses until subordinate ones are wiped out, in real life the recoveries don’t follow the absolute priority rule.
i thought I recalled that this was called the share the pain principle, but Google apparently hasn’t heard of this.
is this ringing a bell for anyone studying more recently than me? Or with a better memory than me?