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The provision of indemnities, particularly those provided to corporate trustees and agents, is an important feature of an effectively functioning structured finance market. It enables the parties involved to allocate the risks of unforeseen expenditure to those parties with the ultimate economic interest in the transaction and allows trustees and agents to keep their fees at a reasonable level.
Whilst the need for indemnities is generally accepted, the terms on which they are provided can be an area of robust negotiation.
Continue Reading Indemnities – beware the consequences of “reasonableness”