Permitted Reorganization Securities means any debt or equity securities which are distributed to the Junior Creditors in an Insolvency Proceeding which are subordinated to the Junior Obligations as to Liens and have payment terms no less favorable to the Senior Creditors than the terms of the Junior Obligations related thereto.
Permitted Reorganization Securities means securities, whether debt or equity, received in an Insolvency Proceeding or a consensual reorganization or restructuring that are subordinated, junior and inferior to the Senior Indebtedness in all respects to at least the same extent as the Subordinated Indebtedness as provided herein.
Permitted Reorganization Securities and “in cash.” Not all agreements will require “in cash,” meaning the disgorgement of non- cash payments by the subordinated creditor could lead to the possibility that the senior creditor receives more than it was owed (although it would have to return any excess). This construct also creates a risk that the conversion to cash of the property received will result in an amount of cash less than the subordinated creditor’s perceived value of the asset. Example: A common debtor in bankruptcy has senior bank debt and subordinated debt. The bankruptcy plan has partial cash repayment to the senior bank and non-cash repayment to both the senior and subordinated debt in form of common stock. The use of “in cash” would require disgorgement and conversion to cash of the common shares received by the subordinated creditors prior to any distributions of any assets to the subordinated debt. Some disgorgement provisions permit the subordinated creditor to retain “permitted reorganization securities” which are securities subordinated to the senior claims at least to the same extent as the current subordinated claim. Thus, for this to result in a different outcome, the senior bank would have to receive preferred stock in lieu of common.7
Examples of Permitted Reorganization Securities in a sentence
The relative rights of Agent and Lenders to Distributions, Permitted Reorganization Securities and any other payment or property distributed by any Loan Party on account of the Obligations will continue after the commencement of any such Insolvency Proceeding.
More Definitions of Permitted Reorganization Securities
Permitted Reorganization Securities means (i) Debt Reorganization Securities that are distributed to the Administrative Agent pursuant to a Plan that has been approved by the Holders, pursuant to a Tranche Vote, as provided in Section 3(f)(i) and are subject to an intercreditor agreement or agreement among lenders that is consistent in all material respects with this Agreement including, without limitation, the payment priority provision in Section 5 hereof (provided that (1) the payment priority set forth in any such agreement shall only apply to payments and/or Proceeds of Collateral upon a new payment priority triggering event as set forth in such agreement that occurs after the effective date of the applicable Plan, (2) such agreement will contain provisions mutually agreed upon by the holders of such Debt Reorganization Securities that preserve the relative economic terms of the First Out Obligations in relation to the Last Out Obligations that have been established with regards to the Applicable Margin and (3) if the holders of such Debt Reorganization Securities cannot agree upon such provisions, such provisions will be as finally determined by a court of competent jurisdiction) and
Permitted Reorganization Securities means (a) Debt Reorganization Securities that are subject to an intercreditor agreement or agreement among lenders that is substantially consistent with the terms and substance of this Exhibit IC-1 (including, without limitation, provisions that preserve the relative payment priorities of the First Out Obligations vis-a-vis the Last Out Obligations that have been established pursuant to the terms of the Credit Agreement); provided, that the waterfall set forth in any such agreement will only apply to Distributions upon a new waterfall triggering event as set forth in such agreement that occurs after the effective date of the applicable Plan, and (b) Non-Debt Reorganization Securities that are not Disqualified Equity.
Permitted Reorganization Securities means any (a) debt securities issued to Second Lien Secured Parties in substitution of or in exchange for all or any portion of the Second Lien Obligations; provided that to the extent such debt securities are secured by Liens on the First Lien Collateral, the provisions of this Agreement will survive the distribution of such debt securities and such Liens will be subordinated to the First Priority Liens to at least the same extent that the Second Priority Liens on the First Lien Collateral are subordinated to the First Priority Liens pursuant to the terms of this Agreement and/or (b) equity securities issued to Second Lien Secured Parties in substitution for or in exchange for all or any portion of the Second Lien Obligations; provided that such equity securities shall not provide for mandatory redemption or mandatory dividend or distribution payments prior to the Discharge of First Lien Obligations; provided further that, in each case, such securities are issued (i) under a plan that (x) is proposed, supported or accepted by the number and amount of First Lien Secured Parties required under Section 1126(d) of the Bankruptcy Code or (y) pays the First Lien Obligations in full in cash on the effective date of such plan or (ii) solely in respect of the general unsecured portion of the Second Lien Obligations, if any.
Permitted Reorganization Securities means debt or equity securities of any Grantor or any other Person, which (x) are provided for by a plan of reorganization, composition, deed of company arrangement, plan of arrangement, adjustment or readjustment or proposal of any Grantor or of its securities or other liabilities that has been adopted pursuant to an Insolvency or Liquidation Proceeding, or any other judicial, governmental or statutory proceeding, and confirmed or approved by a court or other Governmental Authority, if any, having jurisdiction over such proceeding, and (y) if secured by a Lien upon any property of the reorganized debtor on account of the First Lien Obligations and the Second Lien Obligations, the provisions of this Agreement shall apply to such Liens.
Permitted Reorganization Securities means (i) Debt Reorganization Securities that are distributed to the Administrative Agent pursuant to a Plan that has been approved by the Holders, pursuant to a Tranche Vote, as provided in Section 3(f)(i) and are subject to an intercreditor agreement or agreement among lenders that is consistent in all material respects with this Agreement including, without limitation, the payment priority provision in Section 5 hereof (provided that (1) the payment priority set forth in any such agreement shall only apply to payments and/or Proceeds of Collateral upon a new payment priority triggering event as set forth in such agreement that occurs after the effective date of the applicable Plan, (2) such agreement will contain provisions mutually agreed upon by the holders of such Debt Reorganization Securities that preserve the relative economic terms of the First Out Obligations in relation to the Last Out Obligations that have been established with regards to the Applicable Margin and (3) if the holders of such Debt Reorganization Securities cannot agree upon such provisions, such provisions will be as finally determined by a court of competent jurisdiction) and (ii) Non-Debt Reorganization Securities that are distributed to the Administrative Agent pursuant to a Plan that has been approved by the Holders, pursuant to a Tranche Vote, as provided in Section 3(f)(i).
Permitted Reorganization Securities means (i) Debt Reorganization Securities that are subject to an intercreditor agreement or agreement among lenders that is consistent in all material respects with this Agreement including, without limitation, the payment priority provision in Section 5 hereof and (ii) Non-Debt Reorganization Securities.