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

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.