Are some lenders more equal than others? That is a question many lenders are now asking themselves in light of recent decisions authorizing agent banks to act on behalf of their syndicates over the objection of the syndicate’s minority. In short, does the principle of “collective action” really work, and is it legal?

Lender collective action allows an agent to act (or forbear) at the direction of some, but not all, of the members of its lending syndicate, thereby effectively overruling any dissenters. It derives from both contract law principles and practical considerations.

Editor’s Note: Our main authors here address the overall collective action doctrine and then split up to take sides on the controversy; their separate “For” and “ Against” essays accompany this article.