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Fixed and floating charges : the latest conflicting law and how to address the gaps

conference contribution
posted on 2007-01-01, 00:00 authored by Lang Thai
Can book debts be subject to a fixed charge? This question was considered by the House of Lords in National Westminster Bank v. Spectrum Plus Limited [2005] UKHL 41 where the full House was against the idea of a fixed charge on book debts and insisted that only a floating charge had been created. The law in this area is still vague and uncertain in Australia. This paper argues that the financiers and the companies should be given the freedom to decide how they wish to structure their charge documents. The paper sets out to argue that, in respect to the use of book debts as security for a loan, the only way for both the financiers and the companies to do business is to create a sustained workable fixed charge or even multiple fixed and floating charge on book debts. The author explains how this could be possible and how the proposed model would not deny the statutory priority rights of the preferential creditors.

History

Event

Corporate Law Teachers Association Conference (17th : 2007 : Melbourne, Vic.)

Publisher

Corporate Law Teacher's Association

Location

Melbourne, Vic.

Place of publication

Melbourne, Vic.

Start date

2007-02-04

End date

2007-02-06

Language

eng

Publication classification

E2 Full written paper - non-refereed / Abstract reviewed

Title of proceedings

Papers presented at the 2007 Corporate Law Teachers Conference (Deakin University, Melbourne) 4-6 February Corporate Law and Corporate Governance: Stocktaking on Compliance and Enforcement

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