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What are equity security holders?

Equity security holders are owners of equity security interests. An equity security is a legal instrument that grants its holder ownership rights in the issuer (in the case of bankruptcy, the debtor is the issuer). Common types of equity securities include shares in a business (e.g., interests in a limited partnership or shares in a corporation) and rights to buy or sell such shares. Because equity security holders have ownership interests in the debtor’s business, they have the right to vote on the debtor’s reorganization plan. In lieu of a proof of claim, an equity security holder typically files a proof of interest.

Barry Rosenzweig
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Barry Rosenzweig, has 25 years experience as an attorney helping clients solve their legal problems.