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CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.6 - WINDING UP GENERALLY  

Division 6 - Proof and ranking of claims  

Subdivision E - Miscellaneous  

SECTION 563C  DEBT SUBORDINATION  

563C(1)  [Where debt subordination enforceable]  


Nothing in this Division renders a debt subordination by a creditor of a company unlawful or unenforceable, except so far as the debt subordination would disadvantage any creditor of the company who was not a party to, or otherwise concerned in, the debt subordination.

563C(2)  [``debt subordination'']  


In this section:

debt subordination means an agreement or declaration by a creditor of a company, however expressed, to the effect that, in specified circumstances:


(a) a specified debt that the company owes the creditor; or


(b) a specified part of such a debt;

will not be repaid until other specified debts that the company owes are repaid to a specified extent.

 



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