In The News
| August 12, 2010
New ABA Model Intercreditor Agreement Offers Guidance
An intercreditor agreement is, as the name suggests, an agreement among different creditors of a common borrower that specifies the relationship among the creditors, often addressing such issues as priority of payments, subordination of liens, and actions in a bankruptcy of the borrower. This column has tackled intercreditor and subordination issues on several occasions over the past dozen years. During that period, the institutional second lien debt market, and the corresponding importance of intercreditor agreements, have grown enormously. Today we discuss the model intercreditor agreement recently promulgated by an American Bar Association task force for use in negotiating intercreditor arrangements between a lender or lending syndicate making commercial loans secured by a first priority lien on specified collateral (first lien loans) and a lender or lending syndicate making commercial loans secured by a second priority lien on the same collateral (second lien loans).
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
For further information on Dewey & LeBoeuf, please visit www.dl.com. +1 888 532 6383