Majority lenders entitled to withdraw notice which had placed facilities on demand (High Court)

In Strategic Value Master Fund Ltd v Ideal Standard International Acquisition SARL and others [2011] EWHC 171 (Ch), the High Court considered whether the majority lenders under a facilities agreement had the right to withdraw a notice which had placed the facilities on demand or whether this was a matter requiring all lender consent. The court reached its conclusion by analysing whether there was a distinction between waiver of a term and waiver of a right or remedy. The court also considered whether the notice placing the facilities on demand meant that the original repayment schedule no longer applied and whether, on the wording of the facilities agreement, the balance sheet test of insolvency applied to the borrower or a breach of the interest cover covenant had been achieved under the equity cure provision.

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