Following our article last week on emergency liquidity for
businesses acutely affected by the economic impact of the COVID-19
pandemic:
https://www.dilloneustace.com/legal-updates/the-abc-and-de-of-emergency-liquidity-solutions,
we take a brief look at the first item out of the financial first
aid kit – the Standstill Agreement.
It's my party
As discussed last time, a standstill agreement is only effective
as it extends to those creditors pursuing a business for payment.
Practically, it makes most sense for a borrower to reach a
compromise with each of its creditors in turn, beginning with the
most aggressive. Where there is a single lender under a facility,
the situation is straightforward, but allowing for syndication of
the debt or dealing with a shifting body of debt securities holders
is clearly more challenging. So, in bringing creditors to the table
and making them a party to a standstill agreement, it is vital to
ensure that those joining represent either
