Document background
The Postponement And Subordination Agreement is a crucial document in Canadian commercial lending and corporate finance transactions where multiple creditors are involved. It's typically used when a company has different levels of debt or when new financing is being introduced that needs to take priority over existing debt. The agreement ensures orderly priority of claims and helps prevent disputes between creditors by clearly establishing their respective rights and obligations. Under Canadian law, these agreements must comply with federal legislation such as the Bankruptcy and Insolvency Act and provincial security laws like the PPSA. The document becomes particularly important in scenarios involving corporate restructuring, refinancing, or when additional debt facilities are being introduced to an existing corporate structure.
