Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.6 - WINDING UP GENERALLY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 5 of Part 8B.6 .

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.