Intercreditor Agreements in Mezzanine and Second-Lien Loans: Structuring and Enforcing Key Provisions

Negotiating Rights in Bankruptcy, Foreclosure and Sale of Collateral, Payment Blockages, Standstill Periods

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, June 4, 2015

Recorded event now available

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Course Materials

This CLE course will prepare commercial finance counsel to anticipate potential pitfalls and draft provisions in intercreditor agreements that protect lenders in mezzanine and second-lien financing transactions.

Description

Counsel to all lenders, whether senior, second-lien or mezzanine routinely negotiate critical provisions in intercreditor or subordination agreements. However, understanding the impact of these provisions, the current market environment and how courts have analyzed how and when these provisions will be enforced is critical to a successful negotiation. A well-crafted agreement can provide all lenders with protection and at the same time minimize subsequent disputes. But what are the key terms and conditions and how have the courts looked at them in the context of a dispute?

Items to consider include those to protect the priority of claims and/or liens, address rights in bankruptcy (including, DIP Financing, adequate protection, plan voting rights and rights to reorganization securities), maintain rights in the event of foreclosureand sale of collateral, preserve subrogation rights, address payment blockages and standstill periods, and address the right of lenders to amend loan documents.

Listen as our authoritative panel of commercial finance practitioners discusses the key considerations for mezzanine and second-lien lenders when negotiating intercreditor agreements. The panel will outline drafting techniques to address these issues and minimize disputes between lenders.

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Outline

  1. Negotiating and drafting the intercreditor agreement
  2. Critical provisions
  3. Pitfalls to avoid
  4. Common problems

Benefits

The panel will review these and other key issues:

  • What terms should be included in the intercreditor agreement to address mezzanine and second-lien lenders rights in the event of bankruptcy or foreclosure and sale of collateral?
  • How does the agreement strive to preserve subrogation rights?
  • What provisions should be included to address payment blockages and standstill periods?

Faculty

Mark N. Berman
Mark N. Berman
Partner
Nixon Peabody

Mr. Berman is a member of the firm's Financial Restructuring and Bankruptcy Practice Group, as well as the Global...  |  Read More

Joachim, Mark
Mark B. Joachim
Partner
Arent Fox

Mr. Joachim is a member of the firm’s Bankruptcy and Financial Restructuring and Corporate Groups. His practice...  |  Read More

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