Intercreditor agreements—contracts that lay out the respective rights, obligations and priorities of different classes of creditors—play an increasingly important role in corporate finance in light of the continued prevalence of complex capital structures involving various levels of debt. When a company encounters financial difficulties, intercreditor agreements become all the more important, as competing classes of creditors seek to maximize their share of the company's limited assets. This Legal Update delves into the US District Court for the Southern District of New York's recent decision in the bankruptcy case of MPM Silicones, LLC and its affiliates (collectively, "Momentive") and considers the extent to which Momentive proves to have precedential value.

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