Restructuring Support Agreement
(NY)

Summary

This restructuring support agreement template is used by a company and its key constituents to contractually bind each other to the material terms of a restructuring proposal. This template includes practical guidance, drafting notes, and alternate clauses. Before initiating a Chapter 11 proceeding to implement an agreed-upon restructuring, a company will seek binding assurances from the creditors who the company negotiated with that such creditors will support the proposed transaction. In order to lock up the support, the company and those creditors often enter into a plan support agreement, which is also referred to as a restructuring support agreement or a lock-up agreement. The plan support agreement generally provides that the creditors will support and not to vote against the proposed restructuring. In turn, the company agrees to prosecute the plan on the agreed-upon terms within an agreed-upon time frame, typically with certain interim milestones. This template highlights the provisions that should be modified if the agreement is being used in connection with a pre-negotiated bankruptcy or with a prepackaged plan. This template provides that it will be governed by New York law. Counsel should be aware that the state of the law with respect to lock-up agreements is not consistent across jurisdictions and should advise the client accordingly. For more information on restructuring support agreements, see Plan Support Agreements. For additional resources, see Prepackaged Bankruptcy Resource Kit and Out-of-Court Restructuring and Liquidation Alternatives Resource Kit. For a tracker summarizing filing information in mega Chapter 11 bankruptcy cases, including prepack and prearranged bankruptcies, see Mega Chapter 11 Filings Tracker (2024 to Present).