Priority & Ranking Arrangement - Movable Assets
Documentation of Intercreditor Priority between Security Rights.
A ranking and priority arrangement serves to legally establish the relationship between multiple security rights or creditors with competing claims on movable assets.
The documentation determines which party may first take recourse in the event of enforcement or execution and under which conditions this priority may be exercised.
Scope of application
This document is applied when:
- Multiple pledgees are involved.
- Additional financiers join.
- Existing securities need to be restructured.
- A new financier requires a specific ranking position.
- Layered security structures are in place.
Legal components
Depending on the situation, the arrangement may include:
- Determination of primary and secondary ranking.
- Agreements on distribution of proceeds upon enforcement.
- Standstill or suspension agreements.
- Restrictions on independent enforcement.
- Information obligations between creditors.
- Amendment and accession mechanisms.
The arrangement is aligned with the underlying security documentation and financing structure.
Preliminary legal analysis
Prior to drafting, the following is assessed:
- Existing ranking relationships.
- The nature of the security rights involved.
- Contractual restrictions in existing documentation.
- Insolvency risks.
- The economic interests of the parties involved.
- Based on this assessment, the priority structure is legally developed.
Integration within broad financing structures
A ranking and priority arrangement is often integrated with:
- Intercreditor agreements.
- Financing agreements.
- Security and structural documentation.
- International financing structures.
Submit structure
Do you want to determine how the ranking between multiple security rights should be legally arranged?
Each request is legally analyzed beforehand to ensure the structure is implemented correctly.