Article/Intelligence
EMEA Cooperation Agreements Tracker 2024 – Creditors Improve Bargaining Power Against Restructuring Debtors
Legal Analyst: Shan Qureshi Cooperation agreements, designed to strengthen creditors’ collective bargaining power against borrowers, have recently gained prominence in Europe. These agreements sometimes arise from the need for creditors to safeguard their credit, particularly when covenant protections are inadequate and debtor intentions unclear. Reorg has tracked the Cooperation Agreements publicly entered into in Europe since the beginning of 2024 Much like relying on directors’ duties to control the management of an issuer, entry into a cooperation agreement by a lender, is an “after the horse has bolted” maneuver. There are inherent difficulties in arranging and agreeing cooperation agreements among multiple creditors (which often have varying interests and are placed across the capital structure). Cooperation agreements cannot prevent borrowers from undertaking transactions that are permitted under the terms of their credit documentation (for example, drop-downs or other permitted redesignations that remove value from the creditors’ remit). EMEA Cooperation Agreements 2024 Debtor Name First Reported Date Co-Op Group Advisors (Legal; Financial) Creditors Party to Co-Op Sponsor / Controlling Shareholder Description Ardagh 6/27/2024 Akin Gump; PJT Partners Secured Notes, Unsecured Notes; HoldCo Notes 24% Public Float, Paul Coulson The noteholders that entered into a cooperation agreement represent more than 53% of the[...]