What Is The Purpose Of A Standstill Agreement
When the applicants entered into the third status quo agreement, they still had more than three weeks to initiate proceedings. If the defendant`s position is correct and the applicants were no longer at the time of the expiry of the third status quo agreement, the applicants risked losing their right of appeal under the conclusion of the agreement. The status quo agreement was intended to preserve the rights not to risk their loss. The concept of a status quo agreement refers to different forms of agreements that companies can enter into to delay actions that could be taken otherwise. In light of recent developments in the Treaty Interpretation Act, the Tribunal considered the appropriate approach to the setting of the recitals and their interaction with operational terms. If the recitals and operational provisions of an agreement are clear but inconsistent, operational provisions should in principle be preferred (Re Moon (1886) 17 Q.B.D. 275). However, the courts place greater emphasis on the actual context and the recitals are increasingly being examined to assist in contractual interpretation. These recent cases give the impression that it is difficult to reach a status quo agreement, but that agreements that meet the needs of both parties are concluded every day. Other problems may arise if the parties do not reach an agreement. A status quo agreement between a lender and a borrower may also exist when the lender stops requiring a planned interest or capital payment for a loan to give the borrower time to restructure its debts.
If the applicant requests an agreement shortly before the statute of limitations expires, the delay may be problematic. Even if the conditions are definitively established, all the formal conditions agreed by the parties, such as the signing, dating and restitution of the contract, cannot be met until the critical date. As a result, the status quo agreements were used to suspend the statute of limitations and the applicants had asserted their rights in a timely manner. The sigh of this construction resulted in the applicant having to break the clause prohibiting them from enacting proceedings earlier in order to avoid the statute of limitations. This was patently absurd – the court does not intend to expose a contract as a party that violates its terms for the agreement to work. Coulson J. considered that the agreement was suspended, which gave the applicant time to initiate proceedings after the expiry of the suspensive period. Two scenarios can lead to abuse of process in this context.
The first, illustrated by Lewis v Ward Hadaway, was caused by a cash flow problem in the face of rising court costs. The defendants refused to enter into a status quo agreement, so the complainants had to cover the time to protect the time before receiving compensation to pay the court costs. The plaintiffs` lawyers paid the costs themselves. In order to reduce court costs, they place lower values on claim forms on claim forms that are lower than those the applicants wanted to claim. They then changed application forms and paid the higher expenses before they sent the application forms. This has been described as an abuse of process. The debtor company will be a party, with operating subsidiaries holding valuable assets or at risk of violating a formal procedure or its financial obligations, as well as, as a general rule, the ultimate parent company. Other parties will be creditors and other stakeholders essential to the success of the business, for example.B.
key customers, suppliers (if the entity is a critical customer, useful concessions can be obtained) and the pension manager/regulator (if there is a significant pension deficit).