Practical Law Glossary Item 1-384-7000 (Approx. 2 pages)
Glossary
Liquidation Preference
A right entitling holders of preferred stock to be paid the principal amount (or original issue price), or some multiple of their investment (typically plus all accrued and unpaid dividends on the preferred stock) before holders of common stock or other junior stock receive any money in the event of the liquidation, winding-up, merger, consolidation, change of control of a corporation, or the sale of all or substantially all of its assets.