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Intercreditor Agreement Collateral Proceeds Turnover Clause

Book Publication Date: May 2014
Description: An intercreditor agreement is an agreement between two groups of lenders with separate debt obligations secured by common collateral of a borrower. An intercreditor agreement delineates the rights and obligations of each group of lenders in relation to the other lenders regarding the collateral if the borrower defaults under its debt obligations or files for bankruptcy. Turnover clauses can require the first lien lenders to turn over any proceeds of borrower collateral to the first lien lenders until first lien lenders have been paid in full.
Type: Contract Clauses
PLI Item #: 133486
Practice Area: Banking and finance, Bankruptcy and restructuring, Bankruptcy process, Collateral management, Collateralized debt obligation, Credit risk, Financial risk, Financing, Intercreditor agreements, Securitization, Structured finance

Keywords: "intercreditor agreement"; "lien subordination"; "first lien obligations"; "second lien obligations"; "first lien claimholders"; "second lien claimholders"; "payment subordination"; "turnover"; "proceeds"

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