Mention should also be made of the decision in Grupo Hotelero5, in which the Supreme Court of the United Kingdom took a less favourable – but not necessarily unfavourable – approach to lenders, applying a more objective standard when determining when a change is sufficiently significant. In this case, the credit agreement required the borrower, as a condition of financing, “that there has been no significant change in its financial situation since the date of the loan agreement”.6 The lender refused to pre-finance the funds, stating that a significant change had occurred with respect to the borrower`s financial situation. A full analysis of the Court`s lengthy arguments would go beyond the scope of that article, but the Court of Justice has made several observations. The court acknowledged that the approach taken by the English courts has long been to obtain what the parties have stipulated in the contract7, indicating that a lender has the right to impose the literal word of the agreement. However, the Court also raised a number of considerations in the interpretation of the MAC clauses. Among these, the Court held that a lender should always verify the financial information it had on the borrower before relying on a MAC8 clause. The lender was known at the time of the conclusion of the agreement11 This was a complex factual case in which the financing of a hotel complex and apartments in London. The developers (a group of Spanish companies and an SPV in English) had two banking facilities, one by the group`s main lender, Banco Bilbao Vizcya Argentaria SA (BBVA credit agreement) and a subsequent facility, provided by a Spanish fund called Carey Value Added SL (Carey), when the developer had encountered financial difficulties and was seeking other financing (loan agreement). One of the companies in the group had taken out a guarantee. In 2008, Carey closed the advances under the loan agreement. The case is relevant for a number of reasons, but this case reference is limited to a review of the court`s interpretation of the relevant (and “plain vanilla”) adverse change (MAC) material clause.
2. Second, as the borrower`s insurance and guarantee under its most recent financial statements, such as: “There has been no material change in the borrower`s financial position since the date of the last audited financial statements submitted to the lender.” 3. Third, as a qualifier for certain insurances, insurance and guarantees provided by borrowers, for example. B”the borrower does not breach a [essential] contract if such an infringement had a sufficient probability of having a substantial adverse effect”. There is no doubt that the pandemic and the government measures that followed are causing considerable damage to many businesses around the world. In the UK context, the pandemic is accelerating, which represents a huge burden for the NHS. So the UK government imposed a lockdown that forced many businesses to close their doors to continue trading and meetings of two or more people were banned altogether (unless they were made up of a family unit that lives in the same house). . . .