Fatal flaws? Errors in security documentation and the consequences for enforcement

Fatal flaws? Errors in security documentation and the consequences for enforcement

CRI_2016_V09_Iss1_Feb_cover_lowIn this article, Simon Passfield a specialist insolvency barrister practising from Guildhall Chambers looks at Errors in security documentation and the consequences for enforcement. The key points arising from the article are as follows:

  • ––The courts have drawn a distinction between invalid appointments and irregular appointments. An invalid appointment is a nullity and the acts of the purported administrator will be prima facie invalid. An irregular appointment is valid provided that the defect does not cause substantial injustice or any injustice is capable of remedy by the court.
  • ––If a debenture does not validly confer on the holder a power to appoint an administrator, any purported appointment will be invalid. If a power to appoint is exercised when the floating charge is unenforceable, the purported appointment is irregular.
  • ––It may be possible to remedy an invalid appointment by making a retrospective administration order. However, the jurisdiction to make such order is doubtful and will only apply in prescribed circumstances.

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About the author:

Neeta started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her paralegal experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office in 2006. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice. She has been working at Lexis Nexis since April 2013.