Co-op Agreements vs. Restructuring Support Agreements (RSA)

Cooperation agreements ("Co-ops") and Restructuring Support Agreements (RSAs) are both commonly used in debt restructurings, but they serve distinct purposes and typically arise at different stages of a transaction.

Co-ops are generally agreements among creditors only and are most often used in the early stages of a situation. At this point, the company is typically not yet formally involved, and creditors use the agreement to coordinate strategy and present a unified negotiating position. These agreements are contractually binding among participating creditors and usually cover cooperation mechanics, cost sharing, information exchange, and economic incentives that differentiate early participants from those who join later. Co-ops also frequently include transfer restrictions, requiring any buyer of the debt to accede to the agreement, thereby preserving alignment within the creditor group.

In contrast, RSAs are entered into between the company and key creditor constituencies once a restructuring framework has largely been agreed. RSAs carry stronger legal weight and set out the terms of the proposed transaction in detail, including capital structure outcomes, treatment of various creditor classes, voting commitments, and key milestones. Their primary function is to lock in support from major stakeholders and provide execution certainty ahead of a formal restructuring process.

In practice, Co-ops function as a coordination tool during the negotiation phase, while RSAs represent a more definitive agreement that underpins transaction execution, often in the lead-up to or during a Chapter 11 process.