In a senior lender/junior lender scenario, the lenders will customarily enter into an intercreditor agreement to establish their respective rights when dealing with a common borrower. The intercreditor agreement will usually provide a restriction on the payments that the borrower can make to the junior lenders upon the occurrence of certain events of default under… Continue Reading
Category Archives: Intercreditor
Subscribe to Intercreditor RSS FeedStandstill Periods in Intercreditor Agreements – What Factors Can Determine Their Length?
Posted in IntercreditorIntercreditor agreements often include a provision which prevents the junior creditor from taking enforcement action against collateral upon default under the junior debt for a specified period of time after notice of the default has been given to the senior creditor – this is described as the “standstill period”. The purpose of the standstill period… Continue Reading
Intercreditor Agreements – Ontario Court of Appeal Considers Circular Priorities
Posted in Intercreditor, PrioritiesA recent decision of the Ontario Court of Appeal illustrates that secured creditors should address their priority position relative to all other creditors of their borrower in order to achieve a complete subordination of competing security. Failure to do so in this case resulted in circular priorities that the Court was left to resolve. In… Continue Reading