How creditor ranking works

Insolvency laws pay creditors in a fixed order of priority. Costs of the process and protected classes come first, unsecured creditors later, and shareholders last, which is why shareholders usually receive nothing.

In US Chapter 7, proceeds are distributed in a set order and each class must be paid in full before the next lower class is paid anything.¹
In a UK compulsory liquidation the Insolvency Service lists the order as the fees and charges of the liquidation, preferential creditors such as wages owed, a floating charge holder, unsecured creditors, interest, and finally shareholders.²
Secured creditors can sell the asset that secures their loan, and any surplus goes into the pool shared with other creditors.²
In a US bank receivership the FDIC pays allowed claims, after administrative expenses, in the order depositors, general unsecured creditors, subordinated debt and stockholders.³
Outcomes vary widely. In the Lehman Brothers Inc. liquidation, customers and secured, priority and administrative creditors were paid in full while unsecured general creditors recovered 41.2841 percent, according to SIPC.⁴

Sources

Administrative Office of the US Courts, Chapter 7: Bankruptcy Basics
The Insolvency Service (GOV.UK), Claim money back from a bankrupt person or company in compulsory liquidation: guidance for creditors (9 January 2025)
Federal Deposit Insurance Corporation, Silicon Valley Bank (failed bank information)
Securities Investor Protection Corporation, Lehman Brothers Inc.'s 14-Year Liquidation Successfully Concludes (28 September 2022)