Document background
The Deed of Subordination of Directors Loan is commonly used in Irish corporate financing arrangements when directors have provided loans to their company and there is a need to formally establish the priority of different debts. This typically occurs when a company is seeking additional financing from banks or other creditors who require assurance that their loans will take priority over existing directors' loans. The deed details the terms of subordination, including when payments can be made on the subordinated debt, what happens in case of company insolvency, and how the arrangement affects the rights of all parties involved. It's particularly important in scenarios where companies are restructuring their debt, seeking new investment, or managing financial difficulties. The document must comply with Irish company law requirements, particularly the Companies Act 2014, and needs to be properly executed as a deed to be effective.
