Spotlight On Intercreditor Agreements In Bankruptcy

Law360, New York (February 10, 2012, 2:37 PM EST) -- For years many, courts declined to enforce most substantive bankruptcy-related provisions in first lien-second lien intercreditor agreements. Junior lien holders would be held to payment subordination provisions, but little else.

The wave of bankruptcies that followed the proliferation of second lien financings in the early 2000s saw courts move toward stricter enforcement of intercreditor agreements by enforcing waivers of voting and adequate protection rights, among other terms. That transition seemed to reflect greater familiarity with and acceptance of the role of second lien debt in the...
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