Distressed Disposals Clause Samples
The Distressed Disposals clause defines the procedures and rights applicable when a party is forced to sell assets under financial distress or insolvency. Typically, this clause outlines the conditions under which such a sale can occur, the process for notifying other parties, and any rights of first refusal or purchase that may be triggered. Its core function is to ensure an orderly and fair process for asset disposal in challenging financial circumstances, protecting the interests of both the distressed party and other stakeholders.
Distressed Disposals. If a Distressed Disposal is being effected, the Security Agent is irrevocably instructed and authorised (at the cost of the relevant Debtor or the Parent) and without any consent, sanction, authority or further confirmation from any Creditor, Subordinated Creditor or Debtor:
(a) Release of Transaction Security/non-crystallisation certificates: to release the Transaction Security or any other claim over that asset and execute and deliver or enter into any release of that Transaction Security or claim and issue any letters of non-crystallisation of any floating charge or any consent to dealing that may, in the discretion of the Security Agent, be considered necessary or desirable;
(b) Release of liabilities and Transaction Security on a share sale (Debtor): if the asset which is disposed of consists of shares in the capital of a Debtor, to release (or instruct to release):
(i) that Debtor and any Subsidiary of that Debtor from all or any part of:
(A) its Borrowing Liabilities under the Subordinated Documents;
(B) its Guarantee Liabilities;
(C) its Other Liabilities;
(ii) any Transaction Security granted by that Debtor or any Subsidiary of that Debtor over any of its assets; and
(iii) any other claim of an Intra-Group Lender, or another Debtor over that Debtor’s assets or over the assets of any Subsidiary of that Debtor, on behalf of the relevant Creditors, the Subordinated Creditors and Debtors;
(c) Release of liabilities and Transaction Security on a share sale (Holding Company): if the asset which is disposed of consists of shares in the capital of any Holding Company of a Debtor, to release (or instruct to release):
(i) that Holding Company and any Subsidiary of that Holding Company from all or any part of:
(A) its Borrowing Liabilities under the Subordinated Documents;
(B) its Guarantee Liabilities; and
(C) its Other Liabilities;
(ii) any Transaction Security granted by any Subsidiary of that Holding Company over any of its assets; and
(iii) any other claim of an Intra-Group Lender or another Debtor over the assets of any Subsidiary of that Holding Company, on behalf of the relevant Creditors and Debtors;
(d) Disposal of liabilities on a share sale: if the asset which is disposed of consists of shares in the capital of a Debtor or the Holding Company of a Debtor (a “Share Disposal”) and the Security Agent (acting in accordance with Clause 14.3(d) (Distressed Disposal — Application of Proceeds)) decides to dispose of all or any part of:
(i) the Liabilitie...
Distressed Disposals. Subject to paragraphs (c), (d) and (e) below, if a Distressed Disposal of any asset is being effected, the Security Agent is irrevocably authorised (at the cost of the relevant Debtor, Security Grantor or the Company and without any Consent, sanction, authority or further confirmation from any Creditor, Debtor or Security Grantor):
Distressed Disposals. (a) Subject to paragraphs (d), (e) and (f) below, if a Distressed Disposal of any asset is being effected, the Security Agent is irrevocably authorised (at the cost of the relevant Debtor, Third Party Security Provider and the Company and, to the maximum extent allowed by applicable law, without any consent, sanction, authority or further confirmation from any Creditor, Third Party Security Provider or Debtor):
(i) release of Security/non-crystallisation certificates: to release the Transaction Security or any other claim over that asset and execute and deliver or enter into any release of that Transaction Security or claim and issue any letters of non-crystallisation of any floating charge or any consent to dealing that may, in the discretion of the Security Agent, be considered necessary or desirable;
(ii) release of liabilities and Security on a share sale (Debtor): if the asset which is disposed of consists of shares in the capital of a Debtor, to release:
(A) that Debtor and any Subsidiary of that Debtor from all or any part of:
Distressed Disposals. (a) Subject to paragraph (d) below, where a Distressed Disposal is being effected, (and following receipt by the Security Agent, in writing, of notice of the same from, in the case of a Distressed Disposal under paragraph (a) of the definition thereof, the Instructing Group in accordance with Clause 6.2 (Enforcement Instructions) or, in the case of a Distressed Disposal under paragraph (b) of the definition thereof, from the relevant Debtor or Security Provider making such disposal) the Security Agent is irrevocably authorised (at the cost of the relevant Debtor, Security Provider, or the Parent and without any consent, sanction, authority or further confirmation from any Secured Party, Debtor or Security Provider) to (or, in the case of the Mexican Security Trust Agreement, to instruct the Mexican Security Trustee to):
(i) release of Transaction Security: (other than where sub-paragraphs (ii) or (iii) below apply) release (or cause the release of) the Transaction Security or any other claim over that asset and execute and deliver or enter into any release of that Transaction Security or claim that may, in the discretion of the Security Agent (or, as the case may be, the Mexican Security Trustee), be considered necessary or desirable;
(ii) release of liabilities and Transaction Security on a share sale (Debtor/Security Provider): if the asset which is disposed of consists of shares in the capital of a Debtor (or, if applicable, a Security Provider), release (or cause the release of) any Transaction Security granted by that Debtor (or, if applicable, a Security Provider) or any Subsidiary of that Debtor (or, if applicable, a Security Provider) over any of its assets and any other claim of another Debtor over assets of that Debtor or over the assets of any Subsidiary of that Debtor (or, if applicable, a Security Provider) (on behalf of the relevant Secured Parties and Debtors) and that Debtor (or, if applicable, a Security Provider) and any Subsidiary of that Debtor (or, if applicable, a Security Provider) shall be automatically released from all or any part of:
(A) its Borrowing Liabilities; and
(B) its Guarantee Liabilities and Existing Guarantee Liabilities;
(iii) release of liabilities and Transaction Security on a share sale (Holding Company of a Debtor or a Security Provider which is not itself a Debtor or a Security Provider): if the asset which is disposed of consists of shares in the capital of any Holding Company of a Debtor or Security Provider, r...
Distressed Disposals. (a) Subject to paragraph (d) below, where a Distressed Disposal is being effected, (and following receipt by the Security Agent, in writing, of notice of the same from, in the case of a Distressed Disposal under paragraph (a) of the definition thereof, the Instructing Group in accordance with Clause 7.2 (Enforcement Instructions) or, in the case of a Distressed Disposal under paragraph (b) of the definition thereof, from the relevant Debtor or Security Provider making such disposal) the Security Agent is irrevocably authorised (at the cost of the relevant Debtor, Security Provider, or the Parent and without any consent, sanction, authority or further confirmation from any Secured Party, Intra-Group Lender, Debtor or Security Provider) to (or, in the case of the Mexican Security Trust Agreement, to instruct the Mexican Security Trustee to):
Distressed Disposals. (a) Subject to paragraphs (d), (e), (f) and (g) below, if a Distressed Disposal is being effected the Security Agent is irrevocably authorised (at the cost of the relevant Debtor, Third Party Security Provider or the Parent and without any consent, sanction, authority or further confirmation from any Creditor, Operating Facility Lender, other Secured Party, Debtor or Third Party Security Provider):
(i) release of Transaction Security/non-crystallisation certificates: to release the Transaction Security or any other claim over the asset which is the subject of the Distressed Disposal and execute and deliver or enter into any release of that Transaction Security or claim and issue any letters of non-crystallisation of any floating charge or any consent to dealing that may, in the discretion of the Security Agent, be considered necessary or desirable;
(ii) release of liabilities and Transaction Security on a share sale (Debtor): if the asset which is disposed of consists of shares in the capital of a Debtor, to release:
(A) that Debtor and any Subsidiary of that Debtor from all or any part of:
(I) its Borrowing Liabilities;
(II) its Guarantee Liabilities; and
(III) its Other Liabilities;
(B) any Transaction Security granted by that Debtor or any Subsidiary of that Debtor over any of its assets; and
(C) any other claim of any Investor, Intra-Group Lender or other Debtor over that ▇▇▇▇▇▇'s assets or over the assets of any Subsidiary of that Debtor, on behalf of the relevant Creditors, Operating Facility Lenders, Third Party Security Providers, Debtors and Agents;
(iii) release of liabilities and Transaction Security on a share sale (Holding Company): if the asset which is disposed of consists of shares in the capital of any Holding Company of a Debtor, to release:
(A) that Holding Company and any Subsidiary of that Holding Company from all or any part of:
(I) its Borrowing Liabilities; A44420063
(II) its Guarantee Liabilities; and
(III) its Other Liabilities;
(B) any Transaction Security granted by that Holding Company or any Subsidiary of that Holding Company over any of its assets; and
(C) any other claim of any Investor, Intra-Group Lender or other Debtor over that Holding Company's assets or over the assets of any Subsidiary of that Holding Company, on behalf of the relevant Creditors, Operating Facility Lenders, Third Party Security Providers, Debtors and Agents;
(iv) disposal of liabilities on a share sale: if the asset which is disposed of consists of sh...
Distressed Disposals. (a) Subject to paragraph (b) below and Clauses 17.3 (Second Lien and Senior Unsecured Debt Protection), 17.4 (Restriction on enforcement by Second Lien Creditors and Senior Unsecured Creditors) and 17.5 (Instructions to the Security Agent), if a Distressed Disposal of any asset is being effected, the Security Agent (and for the purposes of Italian law, as mandatario con rappresentanza also in the name and on behalf (in nome e per conto) of itself and the other Secured Parties) is, to the extent legally permissible, irrevocably released from the restrictions set out in section 181 of the German Civil Code and any equivalent restriction under any other applicable law and authorised and empowered (at the cost of the relevant Debtor, Third Party Security Provider, or the Company and without any consent, sanction, authority or further confirmation from any Creditor, Third Party Security Provider, or other Secured Party, Senior Unsecured Security Provider or Debtor):
Distressed Disposals. (a) If a Distressed Disposal is being effected, the Security Agent is irrevocably authorized (at the cost of the relevant Debtor or the Borrower and without any consent, sanction, authority or further confirmation from any Creditor or Debtor and without any recourse, representation or warranty):
(i) to release the Transaction Security or any other claim over such asset and execute and deliver or enter into any release of such Transaction Security or claim that may, in the discretion of the Security Agent, be considered necessary or desirable;
(ii) if the asset that is Disposed of consists of shares or other Equity Interests in the capital of a Group Member, to release:
(A) such Group Member and any Subsidiary of such Group Member from all or any part of:
(1) its Borrowing Liabilities;
(2) its Guarantee Liabilities; and
(3) its Other Liabilities;
(B) any Transaction Security granted by such Group Member or any Subsidiary of such Group Member over any of its assets;
(C) any other claim of an Intra-Group Lender, or another Group Member over such Group Member’s assets or over the assets of any Subsidiary of such Group Member, on behalf of the relevant Creditors and Debtors and Group Members;
(D) any Transaction Security granted by any Subsidiary of such Group Member over any of its assets; and
(E) any other claim of an Intra-Group Lender or another Group Member over the assets of any Subsidiary of such Group Member, on behalf of the relevant Creditors and Group Members;
Distressed Disposals. I f a Distressed Disposal of any asset is being effected, the Collateral Agent is irrevocably authorised (at the reasonable cost of the relevant member of the Group and the Company and, to the maximum extent allowed by applicable law, without any further consent, sanction, authority or further confirmation or instruction from any Agent, Creditor, Secured Party or member of the Group):
Distressed Disposals. If a Distressed Disposal is being effected, the Security and Intercreditor Agent shall, and is irrevocably authorised to (at the cost of the relevant Senior Obligor or Group Company and without any consent, sanction, authority or further confirmation from any Finance Party, any Senior Obligor or Group Company) release the Deed of Guarantee.