July 01, 2002

Enforceability of Intercreditor Agreements in Bankruptcy (2002, 16:04)

Enforceability of Intercreditor Agreements in Bankruptcy

Probate and Property, July/August 2002, Volume 16, Number 4

By John C. Murray

With the increasing popularity and complexity of sophisticated real estate mortgage transactions involving multiple lenders, such as mezzanine financing and multi-tranched, securitized loans, intercreditor and subordination agreements have become commonplace. These agreements set forth the respective rights and obligations of the parties for matters such as lien priority, priority of payment from cash flow, effect of rating agency downgrades, priority of access to insurance and condemnation proceeds, amendments to loan documents, notice of default and cure, control, additional advances, standstill and forbearance agreements, and permitted refinancing.

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