The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
The term receivables is often used to refer to book debts, although strictly speaking book debts is a narrower term because it refers to 'debts accruing in the ordinary course of... trade as are usually entered in the trade-books' of a company. A receivable has a wider meaning than ‘book debt’ and would include:
the right to receive a payment under a loan agreement
rights to payments under contracts; and
rights to refunds of tax
All other liquidated monetary claims of the security provider would be encompassed by the term ‘receivable’.
Often much of the value comprising a security package is to be found in the receivables due to the security provider. How best to realise the value in the receivables will form a key part of any enforcement strategy.
Collection by any receiver or administrator appointed is a common option.
Where there is a large portfolio of debts that may take considerable time to collect specialised collection agents may be used by the security holder or its delegate. A less common option is for the portfolio of receivables to be sold to a third party. The practical aspects of collection and sale are dealt with below.
This Practice Note discusses:
enforcement options for security holders who want to enforce security over receivables
some general issues potentially giving rise to problems for the security
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