Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Opco definition

What does Opco mean? Opco describes the group company that carries on day‑to‑day trading operations: it enters customer and supplier contracts, employs staff, holds stock and receivables, and operates the business. It typically sits beneath a holding company (holdco). The term is descriptive rather than defined by statute or case law, and is used across corporate, finance, real estate and insolvency practice in England & Wales, Scotland, Northern Ireland and Ireland. An opco may hold certain key operational assets. However, for risk management and financing, valuable assets (for example, real estate or intellectual property) are often ring‑fenced in a separate property company or asset...

UK subordination in restructuring and insolvency: contractual, structural and equitable (non-recognised) subordination; effects on insolvency tests, pari passu, set-off, and registration as a charge

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Senior lenders typically insist not only on superior security over junior creditors, but also on the juniors being subordinated to them—ie the order of claims against the borrower is altered so junior lenders accept their debts will not be settled until amounts due to the seniors have been discharged. It is likewise used to push any intra-group loan repayments behind the servicing of liabilities owed to third-party financiers. As a rule, creditors nearest the principal asset-holding entities (called ‘Opcos’ here, though depending on the structure this might instead be a ‘Propco’) wield the greatest influence over any restructuring/Insolvency, so their ultimate dividend tends to be larger.

The three main types of subordination are:

contractual subordination — both senior and junior finance provided to the same borrower
structural subordination — seniors fund the Opcos, while juniors lend at Holdcos level
equitable subordination — shareholder loans treated as equity; seen in the US and parts of Europe, but not recognised in the UK

The consistent principle is that juniors must not receive or keep payment until seniors have been paid in full...

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Web page updated on 22/05/2026

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