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equitable subordination n
: the subordination of a creditor's claim in a bankruptcy proceeding imposed by the court when the creditor has an unfair advantage over other creditors because of improper conduct or an advantageous position (as of a corporate insider)
Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.