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Model Standstill/Tolling Agreement

posted by Bob Lawless

The Business Law Section of the American Bar Association has posted a model standstill/tolling agreement drafted by Jonathan Lipson and Norm Powell. Business relationships will undoubtedly strain as the crisis means more parties are not able to fulfill their side of a deal. Often, an aggrieved party will have to enforce their rights lest they lose these rights by not taking action. A "standstill/tolling agreement" removes that pressure and preserves the status quo. In Lipson and Powell's words, the goal is to allow parties "to produce an acceptable, temporary workout that obviates the need for litigation and, ideally, preserves a productive economic relationship."

They have made the model agreement publicly available, recognizing that not every business will be able to retain counsel. The agreement is available with annotations to explain its provisions as well as a clean version that parties can use by filling in the blanks. As Lipson and Powell also stress, the model agreement is not intended as a substitute for legal advice and parties should consider retaining legal counsel when possible.

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

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