In the event of dissolution, corporate debenture holders rank in relation to general creditors how?

In the event of dissolution, corporate debenture holders rank equally with general creditors in the hierarchy of claims against a company's assets. Debentures are unsecured debt instruments that represent a loan made to the company, and because they are not backed by specific collateral, they share the same position with general creditors once the company's assets are liquidated.

In the hierarchy of claims upon dissolution, secured creditors have the first claim, as they have specific assets backing their loans. Following secured creditors in the order of payment are general creditors, which include debenture holders. They will be paid out of any available assets before equity holders, such as common and preferred stockholders, who represent ownership in the company and have a residual claim after all debts have been settled.

This understanding of the rank of debenture holders relative to general creditors is key in assessing the risk and potential recovery in the event of a corporate liquidation. Knowing their position helps investors and creditors gauge the likelihood of repayment when a company faces financial difficulties.