CORPORATIONS ACT 2001 - SECT 563C Debt subordination
CORPORATIONS ACT 2001 - SECT 563C
Debt subordination(1) 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.
(2) 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.