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Agreement Still Stands

By Zach Arnold | January 24, 2022

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For example, we agreed with a friend to meet in a week, and the day before the meeting, I want to make sure that nothing has changed in the agreement. Common shareholders tend not to like status quo agreements because they limit their potential returns from an acquisition. A new agreement is negotiated during the standstill period, which usually changes the initial repayment schedule of the loan. This is used as an alternative to bankruptcy or foreclosure if the borrower is unable to repay the loan. The standstill agreement allows the lender to recover a portion of the value of the loan. In case of foreclosure, the lender cannot receive anything. By working with the borrower, the lender can improve their chances of paying off some of the outstanding debt. Another type of standstill agreement occurs when two or more parties agree not to negotiate with other parties on a particular issue for a certain period of time. For example, when negotiating a merger or acquisition, the target and potential buyer may each agree not to solicit or participate in acquisitions with other parties. The agreement increases incentives for the parties to invest in negotiations and due diligence, while respecting their own potential activities. In 2019, video game retailer GameStop signed a standstill agreement with a group of investors who wanted changes in corporate governance, believing the company had higher intrinsic value than that reflected in the share price. A recent example of two companies that have signed such an agreement is Glencore plc, a Swiss-based commodity trader, and Bunge Ltd., an agricultural commodities trader in the United States.

In May 2017, Glencore took an informal approach to buying rubber bands. Shortly thereafter, the parties agreed to a standstill agreement that prevents Glencore from accumulating shares or making a formal offer of rubber band until a later date. A standstill contract is a contract that contains provisions that govern how a bidder of a corporation may buy, sell or vote on shares of the target company. A status quo agreement can effectively stop or stop the process of a hostile takeover if the parties cannot negotiate a friendly agreement. The term standstill agreement refers to various forms of agreements that companies may enter into to delay actions that might otherwise take place. A standstill agreement is a form of anti-takeover measure. The agreement is particularly important because the bidder had access to the target company`s confidential financial information. A status quo agreement may also exist between a lender and a borrower if the lender stops charging a planned payment of interest or principal on a loan to give the borrower time to restructure its liabilities.

In the banking world, a status quo agreement between a lender and a borrower stops the contractual repayment plan of a non-performing borrower and imposes certain actions that the borrower must take. In other areas of activity, a standstill agreement can be virtually any agreement between the parties in which both agree to hold the case for a period of time. This could be an agreement to defer payments intended to help a company survive difficult market conditions, agreements to stop producing a product, agreements between governments, or many other types of agreements. A standstill agreement can be used as a form of defense against a hostile takeover when a target company receives a promise from a hostile bidder to limit the amount of shares the offeror buys or holds in the target company. By soliciting the promise of the potential buyer, the target company saves more time to build other acquisition defenses. In many cases, the target company promises in return to buy back the shares of the potential acquirer of the target company at a premium. Standstill agreements are also used to suspend the usual limitation period for making a claim in court. [1] A company under pressure from an aggressive bidder or activist investor finds a status quo agreement useful in mitigating the unsolicited approach.

The agreement gives the target company more control over the transaction process by requiring the bidder or investor to have the opportunity to buy or sell the company`s shares or launch proxy contests. Has difficulty understanding even short answers in this language. If both sides were clear about what was planned, when and where it should happen, you could just say if you want to improve this issue? Add details and clarify the issue by editing this article. Your pain is well to be expected. The only obvious shortening would be: And so on. By the way, most of them are extremely informal and are mostly heard in pure conversational English. The language level icon indicates a user`s knowledge of the languages they are interested in. Setting your language level helps other users give you answers that aren`t too complex or too simple. Can ask all kinds of general questions and can include longer answers. But at some point, you really don`t earn anything. Other alternatives:. .

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