Read analysis by legal discipline. Articles appear only after editorial approval and publication.
Financing documents can place a solvent operating company in technical default while its scheduled repayments remain current. Cross-default clauses, negative pledges and financial covenants transfer risk across a borrower's business. Their drafting deserves attention because the events that activate them may.
A signed facility agreement does not, by itself, give a lender effective security. The value of collateral depends on the chargor's title, the legal character of the instrument, the required registration or perfection steps and the ability to enforce it when payment fails. Those questions should be answered.
A supplier may believe that the employer has wrongfully terminated a contract. A contractor may have substantial claims for unpaid milestones and extensions of time. Yet the beneficiary may still be entitled to demand payment under an unconditional bank guarantee before those underlying claims are.