Enforcement—debentures and floating charges
Enforcement—debentures and floating charges

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Enforcement—debentures and floating charges
  • What is a debenture?
  • Enforcement events
  • Options for enforcing the security
  • Administration and qualifying floating charges
  • Qualifying floating charge
  • Powers of administrators
  • The effect of the administration
  • Ending administration
  • Receivership
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers?

What is a debenture?

In the context of secured lending, the term 'debenture' means a form of security agreement that grants security interests over a broad range of the security provider's assets as collateral for either the security provider's own obligations or the obligations of a third party.

Debentures typically include:

  1. fixed security over specific assets, ie:

    1. mortgages (including assignments by way of security)

    2. fixed charges, and

  2. a floating charge over all of the other assets of the security provider (ie all the assets that are not covered by the fixed security)

For more information on debentures and their formalities see Practice Note: Key features of debentures.

In the event that a company cannot meet its obligations under a loan agreement or other financial arrangement, lenders will need to consider the options available to them to recoup their losses. One option is to

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