There is no standstill agreement in a “standard form” – it is drafted in the form of a tailor-made document dealing with the specific circumstances of the borrower and its creditors. However, it is not uncommon for creditors to agree that: The parties may enter into forbearance agreements providing for a moratorium on payments to creditors. Isle of Man law does not contain restrictions on status quo agreements. In the face of a credit crunch, debtors and their creditors are free to enter into agreements that define them as being in their long-term interest. Restructuring is usually caused by a default (or the likelihood of default) in the debtor`s financial documents. The default may not be a default of payment, but may be a technical default such as the breach of a financial obligation. A standstill agreement or provision prohibits younger or subordinated lenders from exercising a remedy for a specified period of time after a business defaults. A “remedy” is the enforcement action a lender can take to remedy a default. The judgment develops the junior lender`s default hardening activities to give senior Lender time to take certain measures if he decides to do so. During the standstill period, all appeals are in principle prohibited, unless the agreement explicitly refers to exceptions. As a general rule, standstill measures do not last more than 150 to 180 days after a junior lender has informed the senior Lender of its intention to take enforcement action. As the world slowly emerges from the initial emergency phase of the COVID-19 pandemic and life returns, but not to normal business, at least to growing economic activity, the profound financial repercussions on the economies of certain sectors and for individual businesses are more evident. Given the financial impact, the disappearance of activity for some, the uncertainty in the markets and the limitation of cash flows, the time available to companies subject to financial disputes, operating measures and the imminent prospect of insolvency proceedings does not stop.
Given that some other areas of legal work are temporarily down, it is not surprising that many law firms expect an increasing volume of insolvency and restructuring activities. The Mauritius Insolncy Act 2009 includes a detailed and robust insolvency regime, including an administrative procedure. A director is usually appointed by the directors of the company if it appears that the company will not be able to pay its debts when it matures. . . .