An equity security holder is an individual or entity that owns an equity security of a debtor involved in a bankruptcy case. This typically includes shareholders and limited partners in a partnership. In the context of bankruptcy, these holders have the right to file a proof of interest, which is a document asserting their claim to ownership in the debtor's assets.
This term is commonly used in bankruptcy law, which governs the process through which individuals or businesses can seek relief from debts they cannot pay. Equity security holders may be involved in various legal proceedings, including reorganization plans and liquidation processes. Understanding their rights and responsibilities is crucial for navigating bankruptcy cases effectively.
Here are a couple of examples of abatement:
For instance, if a corporation files for bankruptcy, its shareholders are considered equity security holders. They may file a proof of interest to assert their claim to any remaining assets after debts are settled. (Hypothetical example: A limited partner in a real estate partnership may also be recognized as an equity security holder and can file a claim in the partnership's bankruptcy case.)
| Term | Definition | Key Difference |
|---|---|---|
| Equity Security Holder | Owner of an equity security in a debtor during bankruptcy. | Specifically pertains to ownership in bankruptcy cases. |
| Creditor | Entity owed money by the debtor. | Creditors may not hold equity securities; they hold debt. |
| Debtor | Individual or entity that owes money to creditors. | Debtors are the ones filing for bankruptcy, not holders. |
If you are an equity security holder in a bankruptcy case, consider the following steps:
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An equity security holder is someone who owns shares or interests in a debtor during bankruptcy.