Chargee meaning

This checklist sets out the factors to consider when a company is proposing to grant a floating charge. This checklist proceeds on the basis that an English or Welsh company will grant a floating charge to a lender situated in England or Wales. The company granting the floating charge is the ‘chargor’. The entity receiving the floating charge is the ‘chargee’. The document recording the floating charge is the ‘security document’. For detailed guidance on the nature of floating charges and how they differ from fixed charges, see Practice Note: Fixed and floating charges. For the advantages and disadvantages of taking a floating charge, see Practice Note: Floating charges—advantages and disadvantages. For in-depth considerations when taking a floating charge, see Practice Note: Floating charges. A floating charge may form part of the security package created by a debenture—see Practice Note: Key features of debentures. Debentures typically also include other security interests, such as mortgages, assignments and fixed charges. A floating...

When taking a lease or a transfer from an administrative receiver, the title deeds should include the original debenture, or a certified copy, under which the receiver was appointed a certificate from the chargee (or their conveyancer) confirming the power of appointment under the debenture has arisen the original deed appointing the receiver, or a certified copy a certified copy of the receiver’s notice accepting the appointment (the original is retained by the chargee) HM Land Registry will need all of the above to register the lease or transfer. Although the debenture is usually noted against the property title, HM Land Registry will also verify that it: has been registered at Companies House has been duly executed contains provisions permitting the receiver’s appointment and the proposed disposition Checking the appointment An administrative receiver cannot be appointed under a debenture or charge dated after 15 September 2003, unless the security falls within one...

Title When completing a transfer from a fixed charge receiver, the title deeds ought to contain: the original, or a certified copy, of the legal charge or mortgage under which the receiver was appointed a certificate from the chargee (or their conveyancer) confirming that the power of appointment under the legal charge or mortgage has arisen the original, or a certified copy, of the deed appointing the receiver a certified copy of the receiver’s notice accepting the appointment (the chargee retains the original) HM Land Registry will require all of the above to register the buyer’s transfer. The charge is typically entered against the property title, and HM Land Registry will also verify that it: has been filed at Companies House has been duly executed includes authority for the receiver to be appointed and to complete the disposition In most instances, charges contain an express power of appointment triggered by specified events...

Sleight (as trustee of the estate of Jillian Paula Mascall deceased) v Crown Estate Commissioners [2018] EWHC 3489 (Ch), [2018] All ER (D) 111 (Dec) What are the practical implications of this case? The holder of the funds (the chargee) had no beneficial stake in them, the party who had or might acquire an interest (the Crown) did not wish to take them, and the party who desired the funds (the trustee) had no means of getting them. A trustee can, by a sidewind, recover what has been disclaimed in like situations—in Lee v Lee [1999] Lexis Citation 3298, [1999] BPIR 926, on a chargee’s application for an order under section 320 of the Insolvency Act 1986 (IA 1986), the court granted the order and, exercising its broad discretion, directed that any surplus after the charge was met should be paid to the trustee. The Court of Appeal held this was proper and consistent with the ending of the trustee’s interest under IA 1986, s 315. Accordingly, there...

Re UKCloud Ltd (in liquidation) [2024] EWHC 1259 (Ch) What are the practical implications of this case? In Re UKCloud Ltd (in liquidation), the court concluded that security over Internet Protocol (IP) addresses operated as a floating charge, despite wording in the debenture purporting to create a fixed charge. What proved decisive was the absence of genuine, operational control exercised by the chargee in practice. The ruling serves as a caution that a fixed charge requires demonstrable control by the secured party; mere restrictions on disposals in the security document will not suffice where, in reality, the chargor is left free to conduct its business and use the assets as it chooses. The court was further guided by earlier authorities endorsing an ‘all or nothing’ approach, under which assets captured by a single charging clause must all take the same character — fixed or floating. On that basis, where any assets within the scope of the clause are properly characterised as subject to a floating charge because the chargee...

This Practice Note examines the role of fixed charge receivers from a Jersey standpoint. As there is no fixed charge receivership process in Jersey, it focuses on how Jersey law interacts with English fixed charge receiverships in the circumstances below: security granted by Jersey companies under English law over property located in England; and security constituted under Jersey law over property located in Jersey Security created by Jersey companies under English law over property situated in England In broad terms, the Jersey courts will recognise a charge validly granted by a Jersey company over collateral outside Jersey where a non-Jersey governing law has been properly chosen, which is usually the law of the place where the collateral is located. However, certain aspects of a non-Jersey law charge created by a Jersey company remain governed by Jersey law, applying private international law principles derived from English common law. These matters include the company’s existence, its capacity and corporate authority to enter into the...

This Practice Note outlines: the various forms of share security the principal enforcement options available to security holders practical factors for security holders when choosing appropriate enforcement mechanics further considerations for security holders depending on the context Forms of share security There are three primary categories of security that can be created over shares: (a) a charge, (b) a legal mortgage and (c) an equitable mortgage, each considered below. Historically, a pledge over shares was also possible. A pledge involves delivering possession of an asset as security for the repayment of a monetary debt. This was feasible where bearer shares existed. However, from 26 May 2015, under section 779 of the Companies Act 2006, companies have been prohibited from issuing bearer shares. Holders of bearer shares were granted until 26 February 2016 to surrender them and convert into registered shares (for further information, see News Analysis: Bearer shares—how to avoid a grizzly ending). Charge A charge arises from...

A key characteristic of a floating charge is that, until it crystallises, the chargor may manage the secured assets in the ordinary course of business without needing further permission from the chargee. By comparison, a fixed charge entails the chargee exercising a substantial level of control over the asset subject to the security... This Practice Note examines the consequences of crystallisation of a floating charge the categories of event that trigger or may trigger crystallisation, including automatic crystallisation partial crystallisation For more on the nature of fixed and floating charges, see Practice Note: Fixed and floating charges. For guidance on the pros and cons of floating charges, see Practice Note: Floating charges—advantages and disadvantages. For details on creating a floating charge, see Practice Note: Floating charges. See also Security—frequently asked questions... The effect of crystallisation Impact of crystallisation on priority When a floating charge crystallises, it fastens onto all assets then within the scope of the security and...

date [ date ] Parties [ name of Seller ], in administrative receivership [ and also in liquidation ], incorporated in England and Wales (company registration number [ number ]), whose registered office is at [ address ] (Seller), acting through [ any one of ] its [ joint ] administrative receiver[s], [ name of (first) receiver ] (Insolvency Practitioner) [ of [ address ] OR [ and [ name of joint administrator ] (Insolvency Practitioner) [ both ] of [ address ] ] ] (Receiver[s]) [ name of Buyer ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] [ and whose address for service in England and Wales is [ address ] ] (Buyer) 1 Definitions For this Agreement, the terms below shall mean: Actual Completion Date — the day when the Transfer is in fact completed; Buyer’s Solicitors —...

Date [ date ] Parties [ name of Seller ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] (Seller) [ name of (first) Buyer ] [ and [ name of second Buyer ] both ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] ([ together ] Buyer) 1 Definitions In this Agreement, these meanings apply: Actual Completion Date • the date the Transfer is completed; Buyer’s Solicitors • [ name ] of [ address ] reference [ details ]; [ Charge [ s ] • the charge [ s ] appearing at entry [ number ] [ and [ number ] ] on the charges register of title number [ number ] at [ date of official copy entries ]; ] Completion Date •...

Letter of non-crystallisation This precedent letter is used where a buyer acquires a business/asset subject to a floating charge (the Charged Asset), or a lender takes a second floating charge. It confirms the charge has not crystallised, no steps have been taken to crystallise it, and the chargee consents to either a sale or a second floating charge. Under a floating charge, the chargor may in the ordinary course sell the asset or grant further security (unless restricted) until crystallisation. Once crystallised, the charge becomes fixed and the chargor loses that freedom. Buyers/new lenders should seek confirmation that crystallisation has not occurred. A letter may come from the chargee or chargor, but a chargee’s letter is preferable; though not obliged, chargees usually provide it. Buyers favour unlimited confirmation; chargees often insist on a knowledge qualifier. Chargee’s headed paper; recipient details and date. Reference Debenture/Floating Charge dated [date] (the Security Agreement) between [Chargor] and chargee. Certify: [to the best of our knowledge, information and...