Unfairness and Confusion: Inherent Features of Floating Charge Security

The Law Teacher, Vol 46: Issue 2, pp.197-203

7 Pages Posted: 17 Aug 2015

See all articles by Chrispas Nyombi

Chrispas Nyombi

Canterbury Christ Church University; Canterbury Christ Church University

Date Written: May 15, 2012

Abstract

This paper examines the priority hurdles floating charge holders face in a bid to secure their assets during liquidation. In the past three decades, a handful of events triggered by the Insolvency Act 1986 and the Enterprise Act 2002 have arguably spelled out the priority fate of the typical floating charge holder. Some of the keynote events include the prohibition of an administrative receiver appointment, the creation of the ring-fenced fund or prescribed part for the benefit of unsecured creditors, the rulings in the cases of Spectrum Plus and Re Brumark, the charge categorization campaign and the issues in the Re Barleycorn Enterprises Ltd v Re Leyland Daf Ltd case. The paper illustrates that a floating charge in today’s commercial world is somewhat an empty shell, despite its enormity on paper.

Keywords: Floating charge, priorities during insolvency, pari passu, distribution of assets

Suggested Citation

Nyombi, Chrispas and Nyombi, Chrispas, Unfairness and Confusion: Inherent Features of Floating Charge Security (May 15, 2012). The Law Teacher, Vol 46: Issue 2, pp.197-203, Available at SSRN: https://ssrn.com/abstract=2645050

Chrispas Nyombi (Contact Author)

Canterbury Christ Church University ( email )

United Kingdom

Canterbury Christ Church University ( email )

North Holmes Road
Canterbury, Kent CT1 1QU
United Kingdom

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