Majority Lenders (Financial Restructuring & Bankruptcy Glossary)

Summary

Lenders that possess the authority to direct the administrative agent to credit bid significant secured debt in order to compete with cash bids at an auction for the debtor's assets. If the majority lender's bid is accepted, the bankruptcy estate will not realize the influx of cash that would otherwise have come into the bankruptcy estate. In this manner, majority lenders hold significant leverage over the bankruptcy process.