Standstill Agreement Meaning

At the international level, it may be an agreement between countries to maintain current facts, in which a liability owed to each other is suspended for a specified period. Glencore plc, a Swiss-based commodity trader, and Bunge Ltd., a US agricultural commodities trader, is a recent example of two companies that have signed such an agreement. In May 2017, Glencore undertook an informal approach to buying bears. Shortly thereafter, the parties agreed on a standstill agreement preventing Glencore from accumulating shares or making a formal bunge offer until a later date. A status quo agreement may also exist between a lender and a borrower if the lender stops requiring a planned payment of interest or principal for a loan, in order to give the borrower time to restructure their debts. A status quo agreement was negotiated between India and the newly formed Dominions of Pakistan and the Princes of the British Empire before their integration into the new territories. It was a bilateral form of agreement. Standstill agreements are also used to suspend the usual limitation period for appealing to the courts. [1] A standstill agreement between a bank and a borrower works as noted above. It puts an end to the contractual repayment plan of a stressed borrower and imposes certain conditions on the borrower.

A status quo agreement is a form of anti-opacity measure. A standstill agreement is a contract that contains provisions governing how a bidder of a company can buy, sell or vote shares of the target company. A standstill agreement can effectively delay or stop the hostile takeover process if the parties cannot negotiate a friendly agreement. In the banking world, a status quo agreement between a lender and a borrower terminates the contractual repayment plan of a borrower in difficulty and forces the borrower to take certain steps that the borrower must take. A status quo agreement can be reached between governments for better governance. In 2019, video game distributor GameStop signed a standstill agreement with a group of investors who wanted changes in the company`s governance, believing the company had an intrinsic value greater than what the share price reflected. A company pressured by an aggressive bidder or activist investor believes that a standstill agreement is useful in weakening the unsolicited approach. The deal gives the target company greater control over the deal process, by imposing on the offeror or investor the ability to buy or sell the company`s shares or launch proxy competitions. A status quo agreement can be used between a lender and a borrower. The borrower has time to restructure his debts.

On the other hand, the lender provides for a certain moratorium on the payment of interest or loan interest. A standstill agreement can practically be an agreement between the parties, in which both parties decide to suspend a particular subject for a certain period of time. This may be an agreement to defer planned payments in order to help a customer overcome strict market conditions. They can also be agreements to interrupt the production of a product. Another type of standstill agreement is in place when two or more parties agree not to deal with other parties on a given issue for a given period of time. For example, as part of a merger or acquisition negotiation of target buyers and potential buyers, they may agree not to solicit or participate in acquisitions with other parties. The agreement increases incentives for the parties to invest in negotiation and due diligence, while respecting their own potential agreement. . . .