When cooperating with borrowers to present amendments and declarations of non-compliance with the above considerations, lenders must take into account the following: a clear line of communication between borrowers and lenders will be important to address all problems arising from their loan contracts following the COVID-19 pandemic crisis. In the event that the group of borrowers needs to receive more liquidity or the borrower feels that it may not be able to meet certain conditions of the loan agreement, the parties must meet the time required to obtain practical consents and waiver declarations. This is particularly the case for large-time funding that may require multi-party approvals. Loan contracts may also include non-financial agreements that may come into play when borrowers are looking for additional draws. Many loans contain provisions that require all of current economic conditions to influence them all: lenders should check whether COVID-19-related relief measures are compromising their ability to accelerate and/or implement a late loan. It is interesting to note that a number of lenders, given that the pandemic has had an impact not only on life, but also on livelihoods, have also begun to question whether the courts have or want to intervene to ease the burden on debtors linked to COVID 19 in the event of a debt dispute. It is apparent from the foregoing that a common law is unlikely to assist a borrower who is having difficulty fulfilling his or her obligations under a loan agreement (provided that he does not refer to formal insolvency proceedings). It is therefore essential to examine the loan agreement itself to determine the potential effects of COVID-19. A restriction: in a rapidly changing situation, we cannot rule out further government intervention infringing on the rights of lenders/borrowers under existing facilities, even though such a radical intervention, which prevents lenders from accelerating credit, might be unlikely. We will continue to monitor the situation. Some lenders question whether the blockage imposed by COVID-19, which has led some, if not most borrowers, to suspend some or all of their activities, is considered a case of insolvency. However, this decision (which was an injunction) has been characterized as a “single case” – and it is unlikely to create a basis for future borrowers to apply for discharge on the basis of force majeure or frustration. The prevailing view remains that a borrower must adapt to the parameters of the relevant regulatory measures to request burden relief because of the impact of COVID-19.

For example, In re Lyondell referred to Chem. Co.[16], a private equity firm on a MAC clause in a revolving credit facility when it refused to finance the application for a $750 million draw, as the applicant company had already begun preparing its insolvency application. The MAC clause required the company to declare that “no event or circumstance that could reasonably be expected to have a significant negative effect” and was defined to “include substantial negative effects on the business, activity, assets, liabilities (real or not) or financial position of the business.” [17] In light of “the whole agreement to identify the intent of the parties instead of reading the MAC clause in isolation,” the Tribunal agreed with the company that insolvency was not an MAC, given that the parties were explicitly negotiating a solvency scheme at closing and that once the closure was completed, they could have negotiated a provision that should have negotiated solvency after closing. [18] In particular, because of the defendant`s inability not to finance the revolver, the applicant`s recovery was limited to the repayment of the principal costs paid by the applicant – a small fraction of the total amount of the credit facility.