What Is A Standstill Agreement In Finance

For a creditor, the alternative of the standstill agreement may be a preferred route, as it does not encircle the creditor`s recovery to legal proceedings and dilution of recovery, since all creditors` claims are decided and liquidation costs are paid from the company`s assets. However, a creditor would not want to use the contractual basis for stagnation if there is a suspicion that the board has or is likely to engage in dishonest market behavior and sell assets to defeat the claims of the creditor and other creditors. In this case, the creditor would be better advised to take the path of security and request the appointment of joint provisional liquidators in order to preserve the prospect of some recovery, even if he has a lower amount and at a much later date. . . .