Intercreditor Agreements: A Grey Area Of The Law

Law360, New York (August 3, 2007, 12:00 AM EDT) -- With the virtual explosion of second lien financings in recent years, the next wave of major bankruptcies will present numerous issues regarding the enforceability of various aspects of intercreditor agreements between first lien and second lien lenders.

While lien subordination and payment subordination are clearly enforceable under ยง 510(a) of the Bankruptcy Code, there is uncertainty regarding the enforceability of provisions in intercreditor agreements that affect fundamental bankruptcy rights.

Many intercreditor agreements purport to transfer or limit the junior creditor's exercise of fundamental bankruptcy rights, such...
To view the full article, register now.

Law360 UK

UK Financial Services

Read Our Latest UK Legal News & Analysis

Financial Services Law360 UK and Insurance Law360 UK provide breaking news and in-depth analysis on U.K. and European Union regulation, enforcement, legislation, and litigation involving banks, investment firms, insurers, and more.