This is an extract of our Insolvency Ii document, which we sell as part of our Finance and Capital Markets Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
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Insolvency: Security Priority Priority on Fixed and Floating Charges Provided i. ii. iii.
they have all been registered properly under s.860 CA: Fixed charge or a mortgage beats a floating charge over the same asset If more than one fixed charge over same asset, it is priority of creation date If more than one floating charge over same asset, it is priority of creation dateRegistration?Late Registration?No Registration?
A charge must be registered at CH (s.860(7)) within 21 days of creation (s.870(1)) and is available for public inspection (s.869(7)) and kept in company's registers (s.876) Company's responsibility to register the charge (s.860(1)), but in practice it is the lender who does it to reflect their interest (s.860(2)) The original charging document and particulars of the charge should be sent along with the fee A mortgage or fixed charge over land should also be registered at the LR The court may grant the power for a late registration where the failure to register was accidental or inadvertent (s.873) The charge registered late is valid from date of registration, not creation Void against administrator, liquidator or creditor (s.874) Consider a negligence suit against the solicitor It is still valid against the company and the debt becomes repayable immediately (s.874(3))
Negative Pledges?It is a contractual promise not to give any more security over the asset without the creditor's consent It will be entered into Form MG01 when the charge is registered to ensure 3 rd Ps have actual knowledge If more security is given anyway: if the new fixed charge holder has actual knowledge of the negative pledge given to a floating charge holder, then he will lose his priority over them
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