Facility agent’s duties limited in scope

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RBS was the facility agent for certain lenders in a complex real-estate financing involving multiple tiers of senior and junior debt. The facility agreement and inter-creditor agreement under which RBS was appointed agent followed the Loan Market Association recommended forms.

After the crash in property prices during 2007–8 the facility defaulted, administrative receivers were appointed and all but the most senior ranking lenders took a hit.

One set of lenders — called the B1 lenders — brought a claim against RBS as agent alleging it had breached its duties to them by not informing them of an event of default in a timely manner. B1 lenders argued they would have sold their participations in the secondary market earlier had RBS told them of the default…

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