The interconnection agreement plays a central role in the right of pledge. It is therefore essential for both lenders to create a solid foundation with regard to their rights and priorities in the event of erosion and failure of a borrower`s financial possibilities. In the absence of such a document, each party may at the same time exercise its own decisions and be inconsistent. The entire trial can be unethical and not economic and quickly turn into a legal imbroglio in court. Junior lenders should exercise caution when evaluating an intermediary certificate before enrolling in them. One way to achieve this goal is to negotiate a fair advantage and develop workable plans. However, if efforts to establish such conditions are in vain, it is advisable that the junior lender waives the agreement or seeks other options. explains the main provisions contained in an interconnection agreement, including: The main objective of the interconnection agreement is to ensure that any type of debt used in the transaction presents a risk corresponding to its pricing, i.e. priority debt (which has a lower yield) has a lower risk than more expensive subordinated debt. It is essential to ensure that priority debt is ranked before resentful debt in terms of the right and priority of payment. The bankruptcy court finds that subordinated creditors may act against secured creditors on a priority basis, subject to the bulk reservation in the interconnection agreement allowing “the exercise of rights and remedies as unsecured creditors” and in the absence of explicit restrictive language against priority secured creditors, and also notes that actions obtained by subordinated creditors will be received under the reorganization plan. ; do not constitute a shared guarantee or the proceeds thereof and are therefore not subject to the distribution provisions of the e-Intercreditor agreement. Interconnection agreements — for example, those between holders of first-pledge rights and secondary sovereign debts — are often formulated in such a way as to seriously compromise the ability of creditors to protect their interests.

For example, such agreements may seriously limit (or virtually exclude) the ability of secured creditors, the sale of assets, the use of cash collateral, a “basic guarantee right” in self-financing, or even a plan if this is supported by priority creditors, even if the plan or sale essentially wipes out younger creditors. The courts were prepared to enforce the terms of such inter-creditor agreements, if appropriately formulated to cover the challenged conduct of secured creditors, and proposed that damages in the event of infringement should be appropriate in order to highlight the risks for creditors secured by the mark, to take action against secured creditors as a matter of priority. For example, in Ion Media Networks v Cyrus Select Opportunities Master Fund Ltd. (In re Ion Media Networks), 419 B.R. 585, 593-98 (Bankr. S.D.N.Y. 2009), appeal dismissed, 480 B.R. . .

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