The SCI Forbearance Agreement Clause Samples
The SCI Forbearance Agreement is a contractual provision in which a creditor agrees to temporarily refrain from exercising certain rights or remedies, such as pursuing collection or enforcement actions, against a debtor. In practice, this clause typically outlines the specific obligations the debtor must meet during the forbearance period, such as making partial payments or adhering to new reporting requirements, and details the conditions under which the forbearance may be terminated. Its core function is to provide the debtor with temporary relief from immediate legal or financial consequences, giving them time to address underlying issues while preserving the creditor’s rights if the agreement’s terms are not met.
The SCI Forbearance Agreement. On July 28, 2009, SCI and certain of its operating subsidiaries, including the Operating Subsidiaries, the Prepetition Agent and certain of the Prepetition Lenders entered into the Forbearance Agreement1 pursuant to which the Prepetition Agent and the Prepetition Lenders have agreed (subject to the terms thereof) to forbear from exercising their default-related rights, remedies, powers and privileges against the operating subsidiaries, among other things. SCI desired to enter into the Forbearance Agreement primarily to permit SCI to reorganize in Chapter 11 without the necessity of commencing bankruptcy cases for most of its subsidiaries, including the Operating Subsidiaries.