The Absolute Priority Rule specifies that creditors are paid following
a predetermined order based on the type of their debt, with the order
terminating when the pie is exhausted. First is secured claims, next
unsecured, next preferred equity, finally common equity, though the
court can impose super priority status to loans given to increase the
value of the assets.
Close, but incomplete. Within unsecured claims that are ten priorities set forth at 11 U.S.C. § 507 (none of which apply here).
A claim or money damages for theft or fraud (e.g. if the stolen asset cannot be located) is an unsecured claim in bankruptcy. And, generally speaking it won't be a priority claim (the main exception would be wage theft, which would be a fourth priority unsecured claim).
A money damages claim for theft or fraud is non-dischargeable in bankruptcy, pursuant to 11 U.S.C. § 523 (if the non-dischargeability issue is raised in a timely adversary proceeding in the bankruptcy case, which is a very strict deadline), so it will survive the end of the bankruptcy case. But during the bankruptcy the distribution that will be paid by the debtor to the money damages for theft credit is a general non-priority unsecured debt.
In the case of a corporation in liquidation, the inability to discharge the debt won't matter because there will be no post-bankruptcy assets and because corporation's debts aren't discharged in a liquidating bankruptcy. In the case of a reorganizing corporation, however, the non-dischargeable debt should survive the reorganization.
But in the case of an individual with future earnings potential, a non-dischargeable debt can be collected from the individual's future income as well as from the bankruptcy estate.
The company obtained assets under contract, did not meet its
obligations under the terms of that contract, and is no longer capable
of specific performance
This is a general non-priority unsecured debt, and unlike the debts for theft or fraud, it can be discharged in bankruptcy.
