One of the key points of negotiation in an intercreditor agreement is the scope of the "standstill" or "remedies block." The provisions prohibit a lender with a junior security interest from exercising its rights and remedies against the collateral. In contrast, the lender with a senior security interest has the exclusive right to determine the exercise of rights and remedies against the collateral. In the context of lien subordination, the standstill period generally focuses on restricting the junior lienholder's actions against the collateral.

 At the same time, an intercreditor agreement that only deals with lien subordination often expressly allows a junior lienholder to file a proof of claim, take steps to preserve their lien, vote on a plan of reorganization, and other actions, even during the standstill period. Thus, ultimately, the rights of the junior lienholder will be heavily dependent on the language of the intercreditor agreement.

 Listen as our authoritative panel of finance attorneys examines key standstill provisions of intercreditor agreements, including scope, nature, duration, the commencement of the standstill, post-termination of the standstill, notice to first lien lender, and reinstatement or reset of the standstill period. The program will discuss the topics from the perspectives of both first and second lienholders.