11 Apr

Overall, and to me, the outcome depended on whether the rules documented in the “modification and reassessment” are properly considered to be waiver declarations and single consents when the borrower`s circumstances have changed more temporarily. For example, it may have had a bad quarter, which led to the temporary break-up of a financial federation. Under these conditions, the borrower will not need a permanent amendment to the facility agreement, but only a short-term waiver from the lenders to prevent it from being late in payment. Sometimes the borrower does not need a waiver from the lenders, but rather the agreement of the lenders for what he wants to do that is prohibited by a negative company in the facility agreement. In Manasseh, two of the three members of the Court held that the “modification and recovery” would replace (and thus terminate) the old facility agreement to which the guarantee relates. As the guarantor of the replacement body did not give its consent, its guarantee did not extend to it. The Bank submitted that a guarantee for the purposes of the facility, as originally documented, had been extended to the “revised and revised” facility agreement that came into force following a default when the global financial crisis hit. Much on the interpretation of the documents to the ease and the guarantee itself, although the case is both interesting for financiers, lawyers and guarantors, since it was a standard guarantee used by one of the big four banks and the situation is common in practice. In the decision of the Court of Appeal of Western Australia in Australia and New Zealand Banking Group Limited/. Manasseh (March 10, 2016) was the central theme of the legal nature and the effect of an amendment and reassessment.

In the case, this was a request from the Bank as part of a guarantee granted at the time of the initial grant of the facility. The result was a victory for the guarantor, who successfully argued that the guarantee granted at the beginning of the facility would not be extended to amended investment agreements that were “modified and amended” at a later date. The parties agree that from the effective date, the parties agree that they have the rights and assume the obligations assigned to them under the agreement on the facility of restitutio integrum. The decision will surprise many financiers and lawyers, who would generally view an “amendment and recovery” as a continuation of the existing facility agreement, rather than as a new agreement that terminated the old one.