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

  • “A very solid and very quiet lawyer, unassuming but good. He’s on my shortlist of people to send work to…"

    -Chambers 2012

  • "Burr & Forman has a very good understanding of business needs with focus on producing tangible results. They always provide solid practical advice without losing sight of the big picture."

    -Best Lawyers 2012

  • “He does a good job for his clients.”

    -Chambers 2012

  • “She has handled as many or more sophisticated transactions as anyone in the state."

    -Chambers 2012

  • "...a rare gem” who can manage a crisis from its inception all the way through to any resulting litigation."

    -Chambers 2013