> ## Documentation Index
> Fetch the complete documentation index at: https://docs.axcess.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# How Recovery Works

After the termination cutoff, each remaining lender receives their share of the cash recovered for that pool, up to the frozen accounting entitlement. Earlier recovery claims are recorded, so later claims pay only the additional amount that has become available. Recovery claims do not burn the remaining shares.

For example, suppose the remaining lender book is 1 million USDC and Alice holds 60% of its shares while Bob holds 40%:

| Recovery received by the pool | Alice’s additional entitlement | Bob’s additional entitlement |
| - | - | - |
| First 300,000 USDC | 180,000 USDC | 120,000 USDC |
| A later 200,000 USDC | 120,000 USDC | 80,000 USDC |
| Total distributed | 300,000 USDC | 200,000 USDC |

The remaining unpaid book is 500,000 USDC. Calling first does not entitle Alice or Bob to take the other’s share. Actual token amounts are subject to integer rounding.

Already-funded withdrawals are excluded from this example: their shares were previously burned and their cash is separately reserved. Before termination, fully covered matured requests can be funded even while other lenders remain invested. The common recovery pool therefore does not retroactively equalize withdrawals completed before termination.

Recovery claims remain subject to current lender approval, but are not blocked by the withdrawal pause. The Note Subscription Agreement also provides for the lender's KYC status to be re-verified at the time of each distribution after a termination. A lender that no longer meets the requirements has its distribution withheld until its status is remediated. A lender with both a funded withdrawal and an unfunded position may need to use both the ordinary claim and recovery claim flows.

During wind-down, protocol fees can be collected only from cash above all outstanding lender entitlements after the cutoff. Any further surplus is junior to those fees. The frozen obligation and an immediately claimable recovery amount are different figures; a high recorded obligation does not mean that amount is currently available in cash.


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