The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:
It's important to consider the underlying finance documents to determine the requisite majorities of creditors which can block certain actions necessary to maintain an effective standstill, and to complete a successful restructuring (see Practice Notes: Key elements of a standstill agreement).
Increasingly companies have many different types of creditor, each with conflicting motives.
It's important to review the finance documents and any intercreditor agreements (see Practice Note: Intercreditor agreements for R&I lawyers) to determine for each tranche of debt:
what majorities are required from each creditor constituency to waive any covenant breaches/events of default (common terms in a standstill agreement) or amend the finance documents
the process for enforcement actions plus the role of any security trustee/collateral agent/facility agent
whether there are any buy-out rights
A valuation (see Practice Note: Where the value breaks and negotiating strength) will identify creditors likely to exercise blocking rights; those close to where the value breaks will maximise any blocking rights they have to secure a better deal.
For loans provided by a group of lenders, a security trustee/collateral agent/facility agent is usually appointed (see Practice Note: The security agent and security trust provisions).
The Loan Market Association (LMA) has produced standard terms which many parties use as a starting point for drafting their documentation. Typically the following actions require
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.