equitable subordination

Definition of "equitable subordination"
  1. A situation in a bankruptcy case where the court devalues the claim of a creditor because they performed unfair actions or were in a favorable position that provided them with an unjust advantage over other creditors
How to use "equitable subordination" in a sentence
  1. The lawyer demanded equitable subordination to ensure that the corrupt creditor did not get undue advantage over other creditors.
  2. Equitable subordination is often considered when a creditor uses undue influence to have an unfair edge in a bankruptcy proceeding.
  3. The judge invoked the principle of equitable subordination to bring fairness to the bankruptcy case.

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