If a borrower becomes insolvent, the proceeds realised from its assets will be shared among its creditors. The effect of security over an asset is to give a secured lender a priority right to be repaid out of the proceeds of that asset ahead of unsecured creditors. Those creditors without security over an asset will take a share of the proceeds of that asset only after the secured creditor has received payment in full.
The following briefing note outlines:
- The main types of security that can be granted;
- The main forms of quasi-security, which can subsist over assets and which might prejudice a lender’s security; and
- The various issues to be aware of when taking security which might affect the validity or enforceability of security.
To download the briefing note please click HERE.
PLEASE NOTE this briefing note contains information about current legal issues and is only intended as a general statement of the law – it does not give legal advice. No action should be taken in reliance on this note without specific legal advice.
For further information please contact:
Colin Winter
Partner, Corporate
Telephone: +44 207 845 7404
Email: colinwinter@iwg.co.uk