BLP Glossary

Question 1

Standstill agreement

Answer 1

the creditors agree not to enforce their rights or remedies for a specified time period to give the company and the creditors some time in which to negotiate a contractual arrangement to resolve the company’s financial problems

Question 2

Moratorium

Answer 2

a period during which creditors are unable to take action to exercise their usual rights and remedies, thereby creating a breathing space for the company to attempt to resolve the situation

Question 3

Monitor

Answer 3

licensed insolvency practitioner

Question 4

Company voluntary arrangement (CVA)

Answer 4

the creditors agree to part payment of the debts owed to them and/or to a new extended timetable for repayment

Question 5

A cross class cramdown

Answer 5

means that one rank of creditor can force the Restructuring Plan on another class of creditor who has voted against the RP

Question 6

Pre-packaged administration

Answer 6

the business and assets of an insolvent company are prepared for sale to a selected buyer prior to the company’s entry into administration

Question 7

Liquidation / winding up

Answer 7

the process by which a company’s commercial life ends

Question 8

Pari passu rule

Answer 8

All unsecured creditors rank and abate equally

Question 9

Net property

Answer 9

the proceeds of selling property that is not subject to a fixed charge, after deduction of the liquidator’s expenses and any preferential debts

Question 10

‘statutory repayment holiday’

Answer 10

company does not have to pay pre-moratorium debts whilst the pre-insolvency moratorium subsists