Issue: 20
Published: 10/05/2006
Timothy Parsons, Marriam Malik
Charges over book debts and plant and machinery since
Spectrum
Following the important decision in National Westminster Bank
PLC v Spectrum Plus Ltd (2005), in which the House of Lords ruled
that a charge over book debts will amount to a floating charge (and
not a fixed charge), Re Beam Tube Products Limited (2006) now
illustrates that this distinction is also of critical importance in
relation to charges over plant and machinery.
Beneficial interests in loan agreements
The question of beneficial interests in rights under loan
agreements has been considered twice recently by the English
courts. In both cases, the underlying transactions involved
comparatively familiar structures - secondary market debt trading
and conduit lending to take advantage of double tax agreements -
and both decisions highlight the need to consider carefully the
operation of "boilerplate" clauses in the context of actual
circumstances.
Connected lender liability
An article on the case of Office of Fair Trading v Lloyds TSB
Bank plc, Tesco Personal Finance Limited and American Express
Services Europe Limited (2006), in which the Court of Appeal
considered whether a four party consumer credit structure fell
within the debtor-creditor-supplier provisions of the Consumer
Credit Act 1974, and whether the provisions of that Act apply only
to transactions entered into in the United Kingdom.
Disclaimers in insolvency and debt subordination:
trust, contract or charge?
The recent Court of Appeal decision in Re SSSL Realisations
(2002) Ltd; Squires v AIG Europe (UK) Ltd (2006) has shed some
interesting light on the effectiveness of subordination
arrangements in insolvency, and has considered the equitable rule
that is akin to set-off known as the rule in Cherry v Boultbee
(1839). The court also considered the nature of unprofitable
contracts for the purpose of disclaimer in insolvency.
Discounting L/Cs - the perils of fraud
An article on the recent French case which has dashed the
hopes of financiers there that they can rely on bills of exchange
where fraud meant that a deferred payment could not be claimed
under a letter of credit itself - as had been suggested in a
leading English case.