In practice, the lenders of two foreclosures generally refused when negotiating a voting clause when negotiating a first pawnbroking/second intercreditation contract. In cases where the clause has been successfully inserted by the executive lenders, parties wishing to exclude a high-level lender`s vote in favour of the junior lender`s debt will argue that the court should follow either Aerosol Packaging or 203 North LaSalle, depending on which party makes the argument. Unfortunately, there is no Supreme Court or District Court decision on this issue to provide guidance and, although there appears to be a tendency to impose a clearly worded inter-creditor agreement, the decisions of the lower courts on access to voting rights are contradictory. Waiver of assignment. There are certain situations where it is useful to waive the right to annulment. For example, leases often contain a provision that the lessor and tenant waive collection rights to the extent that the damages are covered by insurance or agree to take out insurance policies in which the insurance company waives any right of retaliation that it may have against the lessor or tenant. These are two ways to achieve the same result — namely, to ensure that the insurance company is not allowed to outsource to the lessor or tenant. Subrogation vs. Subordination and Opposability Clauses in Bankruptcy The debtor argued that a subrogation clause was not applicable in the event of bankruptcy, referring to In re 203 North LaSalle St. P`Ship, 246 B.R. 325 (Bankr).
N.D. 2000) (subordination agreement with a transfer of voting rights is not applicable as opposed to public order) and In re Hart Ski Mfg. Co., 5 B.R. 734 (Bankr. D. Minn. 1980) (the subordination agreement by renouncing the right of a junior lender to seek adequate protection is not applicable. The Landgericht distinguished these cases because they were disputes concerning the applicability of “subordination clauses” and not “subrogation clauses”. According to the District Court, the political reason is in the 203 N.
The LaSalle and Hart Ski cases – subordinated creditors allow their claims to be protected because “the detachment is only about the priority of payment, not the right to pay” – was simply not applicable to the Avondale case because, unlike a creditor who benefits only from the subordination and transfer of voting rights, a subcontractor “walks in the footsteps of the subcontractor” and “acquires all the rights of the subcontractor”.  The District Court also stated that a subordination agreement under Arizona law with respect to “unspopulated rights,” such as legal rights, was not applicable, but that voting rights in the event of bankruptcy could be transferred. In conclusion: Aerosol Packaging, 362 B.R.