Commentary

51 General statement

BANKING vol 4(1)
| Commentary

51 General statement

| Commentary

E: SUBORDINATION

1: INTRODUCTION TO SUBORDINATION

51 General statement

The purpose of a subordination arrangement is to ensure that the debts of a debtor are paid out in an agreed order of priority which may, on the face of it, infringe the mandatory pari passu distribution provisions relating to payments of an insolvent estate provided for in the Insolvency Act 1986 which requires that in an insolvency unsecured debts are distributed pari passu (without preference one to another).

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