Intercreditor Agreements in Bankruptcy

November 20, 2012

 

An "intercreditor agreement" can be defined as an agreement that sets forth the relative rights, priorities and remedies among one or more lenders with respect to one or more common debtors. The enforceability of an intercreditor agreement in the context of a bankruptcy case is addressed in Section 510(a) of the Bankruptcy Code, which provides that “[a] subordination agreement is enforceable in a case under this title to the same extent that such agreement is enforceable under applicable nonbankruptcy law.” 11 U.S.C. § 510(a). In view of this seemingly clear, unambiguous language, it would seem that courts considering the enforceability of subordination agreements in the context of a bankruptcy case would only need to review and apply relevant nonbankruptcy law. However, whether an intercreditor agreement is a subordination agreement included within the protection of 11 U.S.C. § 510(a) is a valid question. In fact, earlier case law addressing the enforceability of a subordination agreement, or at least some of its provisions, in the context of a bankruptcy case concluded that the scope of Section 510(a) of the Bankruptcy Code is far narrower than meets the eye.

To read more about this topic, please see full article below

Download PDF


Legal Disclaimer:
No representation is made that the quality of services to be performed is greater than the quality of legal services performed by other lawyers.

Featured Attorneys

send article

TESTIMONIALS

  • “His ability to direct the judge to the key issues and avoid a side show has gained much respect and admiration from me as well as, I believe, judges.”

    -Chambers 2012

  • “She’s got a good reputation.”

    -Chambers 2012

  • "Every attorney I have ever dealt with at Burr & Forman provided excellent quality for the price paid. Compared to other law firms I have worked with, the attorneys at Burr & Forman seem to understand more fully that they can serve the client better by doing as much of the background work as possible. I think Burr & Forman operates as a very capable team and is very responsive to its clients. I have always found their commercial real estate experience to be excellent."

    -Chambers 2012

  • "V. J. has earned a reputation as a hard working and well respected litigator who is also extensively involved in the Birmingham community."

    -Chief Operating Officer and former General Counsel for national financial services firm

  • “Melinda's representation, performance, and knowledge for me personally and for my company is unquestionably the ‘top of the line’.  She is prompt, thorough, and responsive.  She has my total trust.”

    -J. P. Lamb, L & A Trucking Co., Inc.