08 Sep 2021by tobiasschaller

Aba Model Standstill Agreement

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We have prepared a standard status quo and toll agreement that can serve as a basis for solving these problems. This would be a model for businesses facing problems with contract enforcement, including payment or collection, that could soon be overwhelming for the parties and the court system. It contains the fundamental elements that such an agreement should contain and thus offers companies a balanced way to “freeze” their business relations legally, while the economy stabilizes. It goes without saying that this type of agreement is not intended as legal advice or as a substitute for legal advice. All users are encouraged to seek advice if possible. When considering available options, companies should include a debate on status quo agreements. Although most commonly used in mergers and acquisitions, standstill agreements should be considered in other circumstances due to uncertain economic times caused by COVID-19. Groundhog Day: A crisis management problem. One of the most worrying aspects of the current official consensus on judgments is its expected expiry at the end of 2020. No one has seriously suggested that the crisis will be resolved by then, or that governments facing debt pressure and the health shock will have access to new funds on acceptable terms next fall.

The expiry date ensures that the same parties would meet again at the same negotiating table on the sidelines of the next CONCLAVE of the IMF, the World Bank and the G20. One way to make future rounds of status quo talks less chaotic and painful is to give all current creditors the opportunity to automatically extend the impasse, provided certain agreed conditions are met. Conditions could include continued sluggish performance and spending in the health sector, a continued fall in exports and gdp growth well below trend, as confirmed by an agreed authority. While we cannot support the ABA Model Agreement as a “one size fits all” document, it can serve as a good starting point for a concrete intermediate basis to obtain an existing business relationship. The difference in history, facts and circumstances associated with any such relationship require the support of a business advisor sensitive to each client`s concerns, in order to prepare the form of the agreement that advances and does not alter the rights and remedies of his client. 1. A reference or description of the underlying relationship between the parties. 2.

A statement on matters subject to a standstill period between the parties. 3. The date of entry into force of the standstill period, the duration of the standstill period and whether and how the standstill period may be extended. 4. A statement indicating the prescribed acts (e.g. B the initiation or continuation of an appeal) during the standstill period and if the corresponding limitation periods are prescribed. 5. That one or more of the parties, taking into account the standstill period, accept limitations on ancillary benefits (e.g. B no transactions outside the ordinary management or no change in the management of the enterprise). . .


Categories: Allgemein