Information About Standstill Agreement

A status quo agreement is a form of anti-support measure. A status quo agreement can be reached between a lender and a borrower. It gives the borrower time to restructure its debts. On the other hand, the lender provides for a certain moratorium on the payment of interest or principal loans. A status quo agreement is an agreement between the company and its creditors that hinders the execution of creditors (see previous: status quo agreement). During the status quo period, a new agreement is negotiated, which generally changes the original loan repayment plan. This option is used as an alternative to bankruptcy or enforced execution if the borrower cannot repay the loan. The status quo agreement allows the lender to save some value from the loan. In the event of forced execution, the lender must receive nothing. By working with the borrower, the lender can improve its chances of repaying some of the outstanding debt. A status quo agreement can be practically an agreement between the parties, in which both parties decide to suspend a specific issue for a specified date. This may be an agreement to defer payments to help a customer overcome strict market conditions.

It can also be agreements to stop the production of a product. Prior to their accession to the new territories, a status quo agreement was negotiated between India and Densern and the princely states of the British Indian Empire. It was a bilateral form of the agreement. A recent example of two companies that have signed such an agreement is Glencore plc, a Commodities trader based in Switzerland, and Bunge Ltd, an American agricultural commodities trader. In May 2017, Glencore took an informal step to buy Bunge. Shortly thereafter, the parties agreed to a status quo agreement that prevents Glencore from accumulating shares or making a formal offer for Bunge until a later date. The agreement is particularly important as the bidder has had access to the confidential financial information of the entity concerned. Another type of status quo agreement occurs when two or more parties agree not to deal with other parties on a particular issue for a period of time.