Document background
The Model Intercreditor Agreement is essential in complex financing structures where multiple creditors hold different ranks of claims against the same debtor(s). This document, governed by German law, is typically used in leveraged finance transactions, project financings, and restructurings where there are multiple layers of debt (such as senior loans, mezzanine financing, and shareholder loans). The agreement sets out the relative priorities of different creditor classes, regulates payment flows, establishes enforcement procedures, and manages security interests in compliance with German legal requirements. It includes specific provisions addressing German law concepts such as parallel debt structures (Parallelschuld) where necessary for security arrangements, and ensures alignment with German insolvency laws and security interest regulations. The Model Intercreditor Agreement serves as a crucial tool for preventing disputes between creditors and providing clear guidelines for various scenarios, including enforcement events and insolvency proceedings.
