Ultimately, deadlock is a form of pragmatic compromise between the company and its creditors: in light of the above, there is no established jersey practice of status quo between creditors and debtors, and there is no case law on this. However, given the very important weight that contributes to the maintenance of contractual agreements between parties in Jersey (according to the customary maxim of the agreement makes the parties law), there does not appear to be any reason why a status quo agreement should not be feasible in this context. Even just before a status quo agreement is signed, banks and other creditors may feel invited to compromise with far from perfect information. It should therefore come as no surprise to find a document containing detailed information and guarantees for borrowers, including current financial accounting, the absence of prejudicial disputes, ownership of assets, maintenance of delivery contracts, tax arrears, etc. This term is generally used in three quite different contexts: (i) in certain acquisition situations where a company and a shareholder agree to limit the shareholder`s ability to acquire other stakes in the company; (ii) in the context of agreements to suspend or extend the statute of limitations for different types of rights; and (iii) in a restructuring context in which a private agreement has been reached between the creditors and the debtor company. It is the latter form of status quo agreement that is discussed in this article. As was discussed last time, a status quo agreement is only effective to the extent that it applies to creditors who conduct a transaction for payment. In practice, the best way for a borrower is to reach a compromise with each of its creditors in succession, starting with the most aggressive ones. If there is only one lender under a facility, the situation is simple, but the syndication of the debt or the management of a changing body of bondholders is clearly more difficult. Therefore, if you put the creditors around the table and make it a status quo agreement, you have to make sure that the parties to the membership represent either all or at least a „dominant“ interest in the debts involved. Credit facility agreements and loan agreements that constitute documents often, but not always, provide that the creditor`s unanimity is not necessary to renounce the borrower`s or issuer`s violations and to reach a compromise – there is some kind of majority rule. Nevertheless, it pays to ensure that in the event of debt cancellation, debt restructuring or restructuring, the formal requirements for obtaining a solution by a super-majority are met, including, in some cases, holding a meeting or conducting an investigation into compensation systems.
A status quo agreement is an agreement between the company and its creditors that hinders the execution of creditors (see previous: status quo agreement). A duly developed facility agreement contains a waiver provision to ensure that any delay by creditors in immediate reporting and payment of the debt (in bank jargon, expedited) or the implementation of a security interest on the borrower`s assets does not compromise their ability to take corrective action in the future.