THE CORPORATIONS LAW

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.