Priority rule meaning

Banking & Finance—October 2024 case round-up Brierley v Otuo and others [2024] EWHC 2549 (Ch) — Security: cost recovery on legal mortgages The court refused the mortgagee’s appeal against a 28 July 2023 order that barred recovery of sale and enforcement costs on specified properties. The decision followed the established rule on legal mortgages set out in Fisher & Lightwood’s Law of Mortgage (paragraph 55.6). Put simply, unless the mortgage contains an express term, there is no implied duty on the mortgagor to pay the mortgagee’s costs, charges and expenses, so they cannot be recovered from the mortgagor personally, save where personal liability has arisen in the particular case. Nevertheless, those costs are rolled into the secured indebtedness and, as against the mortgagor and anyone with an interest in the equity of redemption, they are treated as part of the amount owing under the security and must be satisfied as a condition of redemption......

UK developments LMA publishes response to HM Treasury's UK green taxonomy consultation The Loan Market Association (LMA) has submitted its views to HM Treasury’s consultation on the UK green taxonomy, backing the government’s aims yet urging against making its development a near-term priority. While recognising a taxonomy’s role in improving transparency and deterring greenwashing, the LMA flags major delivery hurdles, including complexity and significant resource demands. It also points out that the Financial Conduct Authority’s newly introduced anti-greenwashing rule already achieves many of the intended outcomes. See: LNB News 07/02/2025 45. Source: Response to UK Green Taxonomy Consultation. LMA publishes response to EU Commission's sustainability reporting simplification initiative The Loan Market Association (LMA) has issued a position paper on the EU Commission’s sustainability omnibus simplification proposal, setting out five key recommendations for reform. The LMA underscores the importance of careful calibration to avoid creating fresh, unintended complexity. See: LNB News 25/02/2025 19. Source: Sustainability Omnibus Simplification Proposal (the Omnibus). For more information on recent news...

INSOL Europe/LexisR&I joint project on implementation of EU Directive 2019/1023—Bulgaria Lexis R&I and INSOL Europe are gathering articles from INSOL Europe’s membership and Country Coordinators, explaining how EU Member States have put into practice Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures designed to enhance the efficiency of procedures relating to restructuring, insolvency and discharge of debt, which also amends Directive (EU) 2017/1132 (the EU Directive). A summary table of the outcomes prepared by INSOL Europe in association with Lexis R&I can be accessed here: INSOL Europe/Lexis+® UK Joint Project on EU Harmonisation Directive 2019/1023: consolidated table. As a general rule, you should seek advice from local lawyers in the relevant jurisdiction to confirm the measures currently in effect and the implications of any particular circumstances or nuances of your case. Question 1: When did/will the new restructuring law come into force? What is/are the name...

Modifications to company voluntary arrangements (CVAs) There is limited statutory direction on how CVA modifications should be approached. Some direction appears in Statements of Insolvency Practice (SIP) 3.2. Alterations to a CVA proposal are acceptable, so long as they do not: reshape the CVA so extensively that it is no longer a CVA at all (for example, a change compelling the company to enter administration would be impermissible) restrict, vary, or diminish a secured creditor’s right to realise its security without that creditor’s express consent reorder distributions so that any preferential creditor loses priority over non-preferential creditors without that creditor’s express consent upset the rule that all preferential creditors share dividends pari passu without the disadvantaged creditor’s express consent Amendments affecting preferential creditors cannot be approved merely because a majority of preferential creditors agree; each affected preferential creditor must consent. Creditors or members may propose modifications before the proposal is considered...

This Practice Note outlines the principal issues to take into account when altering an existing facility agreement. It covers: typical drivers and rationales for changing a facility agreement key considerations when amending a facility agreement in the context of a bilateral or syndicated transaction matters to address where guarantees or security are in place ways to document an amendment, including whether to use an amendment letter, an amendment agreement, or an amendment and restatement agreement usual conditions precedent to effectiveness points concerning fees, costs and expenses This Practice Note does not address one-off waivers and consents. For further information on waivers and consents, see Practice Note: Waivers and consents. For material on amending security documents, see Practice Note: Amending security documents. For general contract law guidance on varying a contract, see Practice Note: Contract variation. Common reasons for amending a facility agreement After execution of the facility agreement and once funding has taken place, the borrower’s situation...

When security is properly created, it binds the security provider and the secured party as between themselves. However, that security will not, as a general rule, bind third parties, such as a liquidator or an administrator of the security provider. In many situations, extra steps are needed to ‘perfect’ the security in question. Perfection is the method by which the security becomes enforceable against certain third parties (though not necessarily every third party). For details on third parties who may not be bound even after perfection, see: The difference between perfection and priority below...

The Freedom of Information Act 2000 (FIA 2000) and the Data Protection Act 1998 (DPA 1998) are distinct regimes, save for the overlap raised here. They otherwise operate separately from one another as a rule. FIA 2000 contains various exemptions. Those exemptions mean the kind, character or even the presence of the information need not be revealed under FIA 2000. For this scenario, the pertinent carve-out is in FIA 2000, s 40, in particular FIA 2000, ss 40(1) and 40(5)(a). Where the material amounts to personal data and the data subject seeks disclosure via FIA 2000, the exemption applies in absolute terms...

Minor children only We direct you to the Practice Note: Intestacy—priority to apply for grant—Q&As (see 'Particular relatives and entitlement to grant on intestacy', 'Minor children only'). Where the person who would otherwise receive a grant is a minor—for instance, where the deceased is survived by minor children but has no spouse or civil partner—rule 32 of the Non-Contentious Probate Rules 1987 (NCPR 1987), SI 1987/2024, stipulates that a grant of administration for the minor’s use and benefit, limited until they attain the age of 18 years, is to be issued to a parent of the minor or to another person who holds parental responsibility...