The Meaning Of Standstill Agreements
A status quo agreement between a lender and a borrower may also exist when the lender stops requiring a planned interest or capital payment for a loan to give the borrower time to restructure its debts. A status quo agreement between a bank and a borrower operates in lines similar to those shown above. It suspends the contractual repayment plan of a stressed borrower and imposes certain conditions on the borrower. A company that is pressured by an aggressive bidder or activist investor believes that a status quo agreement is useful in weakening the unsolicited approach. The agreement gives the target entity greater control over the deal process by requiring the bidder or investor to buy or sell the company`s shares or launch proxy contests. Prior to their accession to the new territories, a status quo agreement was negotiated between India and Densern and the princely states of the British Indian Empire. It was a bilateral form of the agreement. A status quo agreement can be reached between a lender and a borrower. It gives the borrower time to restructure its debts. On the other hand, the lender provides for a certain moratorium on the payment of interest or principal loans. A status quo agreement can be practically an agreement between the parties, in which both parties decide to suspend a specific issue for a specified date. This may be an agreement to defer payments to help a customer overcome strict market conditions.
It can also be agreements to stop the production of a product. Another type of status quo agreement occurs when two or more parties agree not to deal with other parties on a particular issue for a period of time. For example, in merger or acquisition negotiations, the intended buyer and potential purchaser may agree not to seek acquisitions with other parties. The agreement strengthens the incentives of the parties to invest in negotiation and diligence, while preserving their own potential agreement. A status quo agreement is a form of anti-support measure. In 2019, video game distributor GameStop signed a status quo agreement with a group of investors who wanted changes in corporate governance, believing that the company had intrinsic value when the share price reflected. A status quo agreement is a contract that contains provisions governing how a bidder in a company can buy, sell or vote shares of the target company. A status quo agreement can effectively paralyze or stop the hostile takeover process if the parties are unable to negotiate a friendly agreement. In banking, a status quo agreement between a lender and a borrower terminates the contractual repayment plan of a struggling borrower and imposes certain steps that the borrower must take.