Debt subordination
563C Debt subordination
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.
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 specified debt that the company owes the creditor; or
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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