Standstill Agreement Meaning In Chinese

For a creditor, the alternative to the status quo agreement may be a preferred route, as it does not involve the recovery of the creditor in the context of legal proceedings and dilution of recovery because of all the claims claimed by the creditors and the payment of liquidation costs on the company`s assets. However, a creditor does not wish to use the contractual basis for immobility where there are suspicions of dishonest conduct by the board and of having assets to defeat the claims of the creditor and other creditors. In this scenario, the creditor would be the best person to embark on the path to security and seek the appointment of common interim liquidators in order to ensure the prospect of some recovery, even if it is lower and at a much later date. As established elsewhere in this article, the benefits of a status quo agreement benefit both parties when it is economically sound to recover “purchase time” for the debtor company. Given all the challenges that businesses face as a result of the Covid 19 pandemic and its impact on the global economy, the parties could take a consensual approach to creditor-debtor relations for the unique circumstances they face. In Guernsey, it is possible for a debtor and a creditor to reach a broad agreement on an agreement between them in the form of a status quo agreement on terms that any party can accept. The benefits, both for the creditors and for the debtor company, have already been well taken into account. The commonalities of a status quo agreement are typical: a status quo agreement recognizes the economic challenges arising from the seriousness of the situation caused by the Covid 19 pandemic and formalizes a legal agreement between a debtor company and a creditor that could allow the company to survive and creditors to obtain a better return than in the event of liquidation. It offers a period of defined financial stability, keeps the debtor`s business outside of a formal insolvency procedure and concentrates the minds of the company and creditors, who now act as an organized collective, on restructuring plans. When an agreed status quo period expires, but the creditor is satisfied that the company has made good efforts to address its liquidity problems and that the creditor`s debts are reasonably expected to be met soon, it is not uncommon for a status quo agreement to be shaken up and for a new period of leniency to be agreed upon, perhaps with heavier terms; For example, creditors may insist that there be more transparency and/or an agreement so that there is no debt challenge in a liquidation procedure when necessary. From the point of view of the debtor company, the decisive question is whether its medium- and long-term business prospects are strong after the restructuring.

A status quo agreement can reassure directors that it is appropriate for the business to continue trading and that there is a reasonable prospect that the business will survive. The Isle of Man law does not provide for restrictions on status quo agreements. Faced with a credit crunch, debtors and their creditors are free to enter into any agreements they may have in their long-term interests. The second way is restructuring. Since Bermuda has no direct equivalent to administrative procedures in England and Wales or as part of a Chapter 11 proceeding in the United States, this gap has been filled by the practice of the Bermuda Supreme Court over the past two decades, its power to appoint liquidators under the Corporations Act has been interpreted in a fanciful way to include the power to appoint interim liquidators for restructuring purposes. This is a particularly useful option for a Bermuda business in which directors believe the business is viable and provides a high level of creditor support to restructure the company`s debt, but not all creditors can accept this approach or be persuaded to enter into a status quo contract.