12A:1-209 - Subordination of obligation or right to payment of obligation by agreement; security interest not created
12A:1-209. Subordination of obligation or right to payment of obligation by agreement; security interest not created
An obligation may be issued as subordinated to payment of another obligation of the person obligated, or a creditor may subordinate his right to payment of an obligation by agreement with either the person obligated or another creditor of the person obligated. Such a subordination does not create a security interest as against either the common debtor or a subordinated creditor. This section shall be construed as declaring the law as it existed prior to the enactment of this section and not as modifying it.
L.1968, c. 445, s. 1, eff. Feb. 19, 1969.