Material adverse change — what does it mean?
By Anna Voss
Material adverse change (MAC) provisions appear in the majority of loan agreements. The recent Grupo Hotelero case included interpretation of MAC in the context of a representation that there had been no MAC in a borrower’s financial condition.
While adding some clarity, the case doesn’t make a ‘no MAC in financial condition’ representation any easier for a lender to rely upon.
MAC definitions come in many forms but generally refer to changes that have an adverse effect either on the borrower’s business generally, its financial condition, and/or the ability of the lender to call on its security. A simple MAC representation requires a borrower to represent to the lender, at set times, that there has been no MAC since a particular date. If the borrower cannot provide this representation, it will ultimately lead to an event of default…
If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.
News from Shoosmiths
News from The Lawyer
Briefings from Shoosmiths
The government has acted on its plan to revoke site waste management plans in England, with effect from the 1 December 2013.
Remedies for breach of contract: Scottish courts will enforce payment and performance, not just damages
If one party to a contract threatens not to perform their obligations, the innocent party has different options depending on whether they are able to raise court proceedings north or south of the border.
Analysis from The Lawyer
Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future
There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…