Unanimous Lender Consent Provisions: Protection?

Law360, New York (September 23, 2009, 12:10 PM EDT) -- Credit agreements typically provide that any amendment permitting the release of “all or substantially all” of the collateral requires the unanimous consent of the lenders.

Many market participants expect that this provision provides protection against the agent and other lenders from consenting to the sale of the collateral and releasing the corresponding liens without the consent of all lenders.

Contrary to this perception, however, three recent court opinions[1] have concluded that the amendment provision does not apply when the agent exercises remedies against the collateral consistent...
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