Are some lenders more equal than others? That is a question many lenders are now asking themselves in light of recent decisions authorizing agent banks to act on behalf of their syndicates over the objection of the syndicate’s minority. In short, does the principle of “collective action” really work, and is it legal?

Lender collective action allows an agent to act (or forbear) at the direction of some, but not all, of the members of its lending syndicate, thereby effectively overruling any dissenters. It derives from both contract law principles and practical considerations.

Editor’s Note: Our main authors here address the overall collective action doctrine and then split up to take sides on the controversy; their separate “For” and “ Against” essays accompany this article.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]