Q&As

Does an English law debenture created by an English company cover assets outside of England and Wales?

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Produced in partnership with Brian Cain
Published on LexisPSL on 22/05/2018

The following Banking & Finance Q&A produced in partnership with Brian Cain provides comprehensive and up to date legal information covering:

  • Does an English law debenture created by an English company cover assets outside of England and Wales?
  • Summary
  • Local law security
  • Preliminary issues of law
  • Floating charges
  • Fixed security
  • Enforcement
  • Carve outs

Does an English law debenture created by an English company cover assets outside of England and Wales?

This Q&A analyses the general principles that apply in determining whether security created by an English company pursuant to a typical English law governed debenture would give a security holder rights over assets of the security provider situate outside of England and Wales.

For general information on taking debenture security, see Practice Notes: Security—an introductory guide and Key features of debentures and for a discussion of enforcing security, see Practice Notes: Enforcement—debentures and floating charges and Enforcement—fixed charges.

Summary

A company that has given lenders a debenture as security will have created a package of fixed and floating security rights. Normally, this extends to all the assets and undertaking of that company. If the company has assets situate outside of England and Wales, the security holders rights depend upon a mixture of the contractual rights determined by English law and their proprietary effect and recognition under the laws of the state where the assets are situate.

Local law security

As a result of the issues described below, it is normal practice for lenders to take local advice on the form security should take over valuable assets situate in other jurisdictions and the steps necessary under local law to perfect and enforce that security. The issues raised in any particular case will be determined

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