Enforcement—fixed charges
Enforcement—fixed charges

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

  • Enforcement—fixed charges
  • Options
  • Shares and securities
  • Land
  • Cash deposits
  • Receivables
  • Goods and chattels
  • Intellectual property
  • Registration of enforcement of security
  • Future developments

This Practice Note considers the enforcement options available to lenders where they hold fixed security. In particular it covers:

  1. the options available when taking enforcement action

  2. a list of specific considerations when enforcing over specific asset types, and

  3. registration of enforcement of security

Secured lenders will normally aim to ensure that as much of their security is fixed as possible. It is generally not possible to take fixed security over all asset types because the level of control that is required to ensure that the security is fixed is incompatible with the borrower running its business effectively, eg stock and cash in current accounts. A lender will often, therefore, take a debenture to enable it to take both fixed and floating security over all the assets of the company. A debenture may include legal and/or equitable mortgages over land and shares, fixed charges over assets such as cash deposits and goods and chattels, assignments of intangibles such as contract rights and a floating charge over all remaining assets. For information on debentures, see Practice Note: Key features of debentures. For information on the characteristics of fixed and floating charges, see Practice Notes: Fixed and floating charges and Floating charges—advantages and disadvantages.

Security over specific assets may also be taken under individual security documents rather than a debenture. This will normally be appropriate