Co-operatives National Law (NSW)

A co-operative may incur subordinated debt.

Subordinated debt is debt incurred under an agreement under which, in the event of the winding up of the co-operative, a claim of the creditor against the co-operative for the debt is to rank in priority—

equally with the claim of another creditor who is a party to a similar agreement; and

except as provided by paragraph (a)—after the claims of another creditor of the co-operative and before the claims of members to repayment of share capital in the co-operative.

An agreement referred to in subsection (2) has effect despite the provisions of Division 6 of Part 5.6 of the Corporations Act as applying under this Law.