Dziś jest poniedziałek, 18th październik 2021

Standstill Agreement Ontario

Yes. The parties are free to agree on a limitation period other than that provided for by law. As a general rule, this will be to reduce the statutory limitation period and further limit the period during which a right must be invoked (although such agreements may be subject to an assessment of adequacy under the right to unfair terms). So be sure to check each contract to see if it changes the time you can assert a claim. They should also check whether the contract between the parties includes requirements for notification of potential claims. These provisions are, for example, common in the sales documents of companies and failure to comply with the requirements in the form of the date and form of termination can constitute an effective contractual obstacle to the exercise of a right, even if the right is within the scope of the legal prescription. Ultimately, deadlock is a form of pragmatic compromise between the company and its creditors: before proceeding with out-of-court proceedings, the debtor should consider whether there is a realistic possibility of resolving its financial difficulties in terms of long-term viability. If it is not possible to restore the long-term viability of the debtor, other remedies, such as liquidation of the debtor in formal insolvency proceedings, should be considered. The standstill period should be limited to the period reasonably necessary to draw up a viable restructuring plan or to determine that such a plan cannot be drawn up within an acceptable period.

The standstill period varies from case to case, whereas it would normally last no more than a few weeks. During the standstill period, it is essential that the creditors concerned receive adequate reliable information to assess the debtor`s financial situation, understand what caused the underlying financial problems and assess all proposed solutions. If a default event has already occurred under a loan agreement or is likely in the future due to liquidity restrictions for the company, the company and its creditors may enter into a standstill agreement to suspend either the creditor`s enforcement rights (if the delay has already occurred) or the payment obligations (if a delay occurs in the near future). . . .

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