Victorian Consolidated Legislation

Partnership Act 1958 - SECT 7

Postponement of rights of person lending or selling in case of bankruptcy1

7. Postponement of rights of person lending or selling in case of bankruptcy1

In the event of any person to whom money has been advanced by way of loan upon
such a contract as is mentioned in the last preceding section or of any buyer
of a goodwill in consideration of a share of the profits of the business being
adjudged a bankrupt entering into an arrangement to pay his creditors less
than One hundred cents in the dollar or dying in insolvent circumstances, the
lender of the loan shall not be entitled to recover anything in respect of his
loan and the seller of the goodwill shall not be entitled to recover anything
in respect of the share of profits contracted for until the claims of the
other creditors of the borrower or buyer for valuable consideration in money
or money's worth have been satisfied.