Crown Preference

Crown Preference refers to the legal priority the government (the Crown) has over other creditors when a company goes bankrupt or is liquidated. This means that certain debts owed to the government, like unpaid taxes, must be paid first before any money is distributed to banks, suppliers, or shareholders. Crown Preference ensures that essential public revenue is secured, helping to maintain government services. In jurisdictions with this policy, it can impact how much money other creditors ultimately recover during the liquidation process.