Debt Subordination in the Event of a Junior Creditor's Bankruptcy

In the Russian Mergers and Acquisitions journal, there was published the article named "Debt Subordiantion in the Event of a Junior Creditor's Bankruptcy: English Practice and Possible Scenarios in the Context of Russian Law" authored by a Terra Externa's partner, Evgeny Melikhov.

The article continues research on issues related to the debt subordination mechanism that has been actively used in foreign jurisdictions and recently implemented in part in the Russian laws through article 309.1 of the Civil Code of the Russian Federation regarding creditors' agreements on the manner of satisfying their claims against a debtor. This time, the analysis covers the destiny of contractual creditor claim subordination in the event that a junior creditor goes bankrupt that raises a number of the most complex debt subordination aspects. The article provides the overview of the rules developed on the topic in English practice; then, possible implications and risks in the context of Russian law are reviewed. 

The text of the article (in Russian) is available in the Russian Mergers & Acquisitions journal, 2015, No. 6 (20). See English version.

Key words: debt subordination, creditors' agreements, subordination agreements, intercreditor agreements, English law, junior creditor's bankruptcy.