Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency
3 Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency
In the event of any person to whom money has been advanced by way of loan under a contract of a type mentioned in section 2, or of any buyer of a goodwill in consideration of a share of the profits of the business, being adjudicated insolvent or taking the benefit of any Act for the relief of insolvent debtors, or entering into an arrangement to pay the person's creditors less than one hundred cents in the dollar, or dying in insolvent circumstances, the lender of the loan is not entitled to recover anything in respect of the loan, and the seller of the goodwill is not 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.
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.