Legal Definition of Fair and equitable:  In a bankruptcy, fair and equitable is a term used to signify that everything is being done to see that creditors are paid fairly and reasonably, and that the stockholders are also treated equitably. Such treatment generally takes place during the reorganization of the bankrupt company | Learn about the legal definition of fair and equitable in bankruptcy and how it affects creditors and stockholders. Discover why fair treatment is important for successful reorganization and the protection of rights. Seek professional legal advice to navigate bankruptcy laws fairly and equitably