Practical Law Glossary Item 6-383-2181 (Approx. 3 pages)
Glossary
Equity Squeeze
This term, related to the lenders' step-in right, is used in leveraged lease financings and refers to provisions in the loan documents that allow the lenders to foreclose on the security interests granted by the stockholder in the equity interests of the borrower without foreclosing on the security interests granted by the borrower in the assets of the borrower. An equity squeeze removes the stockholder of the borrower or the project company from the project while allowing the project or lease to continue. This may happen even if the events that triggered the lender's exercise of remedies were caused by or attributable to an act of the lessee or another participant in the project.