Document background
Intercompany Subordination Agreements are essential tools in corporate group structures where multiple entities have financial obligations to each other and to external creditors. These agreements, governed by English and Welsh law, are particularly crucial when a group takes on external debt or undergoes restructuring. The Intercompany Subordination Agreement establishes a clear hierarchy of payments, prevents structural subordination issues, and provides certainty to external lenders about the treatment of intercompany claims. It typically contains detailed provisions about payment restrictions, turnover obligations, and limitations on enforcement actions.
