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A Subordination Agreement lets creditors change their priority ranking in Swiss debt collection proceedings. When multiple lenders have claims against the same debtor, this agreement allows a senior creditor to voluntarily step back and give another creditor higher priority for getting repaid.

These agreements play a crucial role in Swiss banking and corporate restructuring. They help companies secure new financing by letting fresh lenders move to the front of the repayment line, while existing creditors agree to be paid later. Under Swiss law, the agreement must be explicit and meet formal requirements to be legally binding in bankruptcy proceedings.

Consider using a Subordination Agreement when your company needs additional financing but existing lenders are blocking the way. This powerful tool helps restructure debt priorities, especially when a Swiss business faces cash flow challenges or expansion opportunities that require new funding sources.

The agreement becomes vital during corporate restructuring, debt refinancing, or when securing emergency capital. For example, banks often require subordination from existing creditors before extending new credit lines. It's particularly useful in family businesses where informal loans from relatives need to be properly ranked behind institutional lenders to unlock commercial financing.

• Subordination And Non Disturbance Agreement: Combines debt ranking changes with tenant protection rights, commonly used in commercial real estate financing
• Non Disturbance Agreement: Focuses purely on protecting tenant rights when property ownership changes, without debt restructuring
• Attornment Agreement: Ensures tenants recognize a new landlord after property transfer or foreclosure
• Real Estate Subordination Agreement: Specifically designed for property mortgages and construction loans, adjusting lien priorities

• Banks and Financial Institutions: Primary users of Subordination Agreements, often requiring them before extending new credit lines or restructuring existing debt
• Corporate Borrowers: Swiss companies seeking additional financing while managing multiple creditors
• Private Lenders: Family members or investors who agree to subordinate their loans to facilitate company financing
• Legal Counsel: Draft and review agreements to ensure compliance with Swiss debt collection laws
• Insolvency Administrators: Reference these agreements when determining creditor rankings during bankruptcy proceedings

• Identify Parties: Gather full legal names and details of all creditors, their claim amounts, and rankings
• Document Claims: List all existing debts, including dates, amounts, and current priority positions
• Define New Rankings: Clearly specify the new priority order for debt repayment
• Verify Authority: Confirm signatories have proper authorization under Swiss law
• Draft Agreement: Use our platform to generate a legally compliant document that includes all required elements
• Review Terms: Check that payment conditions, trigger events, and enforcement mechanisms are clearly stated

• Party Details: Full legal names, addresses, and registration numbers of all creditors and debtors
• Debt Specifications: Precise description of existing claims, amounts, and dates
• Priority Structure: Clear statement of new ranking order and subordination terms
• Trigger Events: Conditions that activate the subordination provisions
• Enforcement Rights: Specific remedies and procedures under Swiss debt collection law
• Duration Clause: Term of the agreement and any termination conditions
• Governing Law: Explicit reference to Swiss law and jurisdiction
• Signature Block: Proper execution format for Swiss legal entities

While both Subordination Agreements and Credit Agreements deal with debt arrangements, they serve distinct purposes in Swiss banking and finance. A Credit Agreement establishes the initial lending relationship and terms, while a Subordination Agreement modifies the priority of existing debts.

• Primary Function: Credit Agreements create new debt obligations, while Subordination Agreements rearrange the payment priority of existing debts
• Timing of Use: Credit Agreements come first when establishing loans, while Subordination Agreements typically follow later during refinancing or restructuring
• Party Requirements: Credit Agreements involve just lender and borrower, while Subordination Agreements need multiple creditors to agree on rankings
• Legal Effect: Credit Agreements establish payment terms and conditions, while Subordination Agreements specifically modify creditor priorities under Swiss debt collection law