Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494417
Contractual Subordination 13 Subordination based on a contractual agreement between creditors whereby junior creditors agree to turnover anything they receive in an insolvency/bankruptcy until the senior creditors are paid in full 01 Junior creditors must expressly agree to be subordinated to senior creditors 02 These contractual agreements are known as "intercreditor agreements" or "subordination agreements" Temporal Subordination Other debt or obligations (such as, mandatorily redeemable preferred stock) of the issuer, which mature or are otherwise payable prior to the debt lent out by the lenders, are effectively senior in right of payment (i.e. it gets paid out before the lenders get paid back)