Comment: Wait a minute...

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Wait a minute...

Working through this from a libertarian slant.... If a bank plays too many games and goes under, don't we want it to go under? And in that process, shouldn't all accounts be settled first? In other words:

Bank calls for bankruptcy.
Assets and transactions are frozen.
Bankruptcy managers call in all outstanding loans.
Managers disperse assets and revenue to creditors (depositors).
Managers allocate outstanding balance of revenue to outstanding creditors.
Some debtors are left wanting.
If balance is too negative, some assets get allocated to creditors get re-prioritized depending on the terms of their contracts.

I'm not clear on this but don't creditors stand in roughly the following order?

Secured deposits
Unsecured deposits
Contracted payments
Preferred shareholders

Can't this become a legal issue where contract law warrants lawsuits?