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

  • “Very much a documentation person. She is behind the scenes and explains things very well. She...has wonderful skills.”

    -Chambers 2012

  • “I have worked with Chris Linde and Eric Golden on two separate legal matters.  In both, their level headedness and systematic approach to the various outcomes were planned and continually communicated with me. I felt very much a part of the process. While the legal process was drawn out due to the court system, Chris and Eric made the process as smooth as possible and never promised anything they knew they couldn't deliver on.  I highly recommend both of them for legal issues and will definitely retain them again on new issues that may arise.”

    -John Lehr, MD

  • “John Kavanagh and Ed Bowron did an excellent job."

    -Chambers 2012

  • "I have worked most closely with Greg Harley and Read Morton. They are very thorough and very knowledgeable about our business. They inspire confidence: you just know you are in good hands when you work with them."

    -Telecommunications client

  • “Scott generously provided advice and assistance to our small startup. He was responsive to our needs and tolerant of adjustments we requested throughout the development of our operating agreement. We’re probably one of Scott’s smallest clients, but he offered our startup his full attention and consideration as if we were one of his largest. We’re grateful for his help.”

    -Sam Pugh