Subordination meaning

Connaughton v Greater Glasgow Health Board [2025] EAT 32. The EAT affirmed an employment tribunal’s decision that Dr Kevin Connaughton could not pursue claims against the health board because no relationship of employment existed, concluding that his position was unlike that of Uber drivers who secured notable workers’ rights. The EAT observed that the clear wording of domestic legislation did not support the interpretation advanced by the claimant. Connaughton, general practitioner, issued proceedings seeking compensation for periods he was absent between 2011 and 2020, together with payment for holiday that had accrued. The success of his case turned on whether he qualified as a worker, and the EAT has now confirmed the tribunal’s conclusion that he did not, and he could not recover sums sought in the claim...

Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings plc (in administration) and others; Joint liquidators of LB GP No 1 Ltd (in liquidation) and another v Joint administrators of Lehman Brothers Holdings plc (in administration) and another [2021] EWCA Civ 1523 What are the practical implications of this case? The effect of the court’s adjustment to the rule against double proof is that a surety who makes a part payment under a settlement and, in doing so: waives its right of indemnity against the insolvent principal debtor; and obtains an assignment from the creditor of the principal debtor’s liability, will be confined to proving for the remaining unpaid amount. In its capacity as assignee, it cannot rely on the general double proof rule that allows an unpaid creditor to prove in full without setting off any part payment made by a surety. Parties should therefore ensure that such settlements and assignments are negotiated and drafted with this outcome in...

Banking & Finance—December 2023 and January 2024 case round-up The Joint Administrators of Lehman Brothers Holdings plc (In Administration) v LB GP No 1 Ltd (In Liquidation) and others [2023] EWHC 3056 (Ch) Intercreditor—ranking of statutory interest on subordinated debt The High Court examined whether statutory interest owed to a subordinated creditor should be met before principal due to another subordinated creditor sitting lower in the payment waterfall. This required construing the contractual priority provisions and how they interact with IR 14.23, which regulates the payment of interest. The court held that statutory interest due to the higher-ranking subordinated creditor must be paid ahead of principal payable to the lower-ranking subordinated creditor. The judge noted that, when provable debts are in competition, priority turns on the parties’ contractual arrangements, in particular the subordination terms governing the junior claim. IR 14.23(7) does not override such arrangements and falls to be read subject to the contractual subordination. The wording “liabilities in respect of the Notes” was interpreted broadly...

Loan market and developments Overview Broadly, Scotland’s loan market mirrors that of England. Financial services regulation operates on a UK‑wide basis; a substantial body of legislation governing companies and other corporate vehicles (including corporate insolvency) likewise applies across the UK; and all Scottish clearing banks conduct business in every UK jurisdiction, as do their counterparts across the UK. In practical terms, this means English law governed loan documents typically require minimal amendment for UK cross‑border lending transactions. There are, however, some differences in terminology and certain statutory variations that must be allowed for; beyond those matters, an English law loan document and a Scots law loan document are closely aligned. It is commonplace, for example, for English law loan agreements to be deployed in Scottish lending transactions. The principal divergences between the jurisdictions arise in relation to property law and to the law concerning rights in security, where Scots law and English law are notably distinct. Lending Is it necessary to secure any consents or licences to...

Loan market and developments Please provide a succinct outline of the current condition of the loan markets in your jurisdiction and any noteworthy recent developments. The US corporate loan market remains a significant pillar of the US economy. While the US loan market has undergone considerable change in recent years, it is still resilient and continues to be one of the most inventive and consequential areas within the US capital markets. Two principal components of the US corporate loan space are broadly syndicated loans (BSL) and private credit transactions. The BSL segment is a key funding source for medium- and large-sized companies, comprising loans where multiple banks and non-bank financial institutions extend finance through a syndicate of lenders. Private credit typically involves lending by non-bank lenders on a bilateral basis or by a small cadre of lenders (often termed ‘club deals’). Both segments have seen strong growth and transformation over the past several years. Broadly Syndicated Loans Although private credit often captures more media focus, syndicated lending...

Loan market and developments As the financial centre of the Asia Pacific region and a key channel for Chinese offshore borrowing, Hong Kong stands among the biggest and most active syndicated loan hubs in Asia Pacific (excluding Japan), often contributing more than 20% of the region’s total syndicated volumes. A sustained spell of low interest rates and plentiful liquidity across Hong Kong’s banking system has kept funding widely accessible to borrowers. Bloomberg indicates that, in the sustainability-linked loan arena, Hong Kong led the Asia Pacific region (excluding Japan), delivering a record 31.4% share of overall issuance. This strong demand has also boosted HKD-denominated activity, making HKD the second most utilised currency in the sustainability-linked loan market for H1 2024... Please provide a brief overview of forthcoming changes to the law or other matters that may affect the loan markets or the responses to the questions

This instrument bears the date [ insert day and month ] 20[ insert year ] and is in respect of the loan notes referred to below. Parties [ Insert name of issuing company ] incorporated in England and Wales under number [ insert company number ] whose registered office is at [ insert address ] ( Issuer ) background: The Issuer has resolved to create, in aggregate, up to an overall nominal maximum of £[ insert number ] [ insert rate ]% [ subordinated ] redeemable loan notes, the same to be constituted in accordance with, and as set out in, this document, and constituted accordingly...

This Deed is entered into on [ insert day and month ] 20[ insert year ] Parties [ insert name of party ] of [ insert address ] (the Senior Lender); [ insert name of party ] of [ insert address ] (the Junior Lender ); [ insert name of party ], a company incorporated in [ England and Wales ] under number [ insert registered number ] whose registered office is at [ insert registered office ] (the Borrower ). Recitals: The Senior Lender has agreed to make available to the Borrower a loan facility in accordance with the terms of the Senior Facility Agreement (as defined below). It is a condition precedent to the utilisation of the Senior Facility (as defined below) that the Junior Lender and the Borrower enter into this Deed with the Senior Lender. [ [ insert further details if required ] ] The parties agree: 1...

m.v. [ insert name of vessel ] (the Ship ) Dated: [ insert date ] To: [ insert name of charterer ] We, [ insert name of owners ], as Owners of the Ship, hereby notify you that, pursuant to a charter assignment dated [ insert date ] made between us and [ insert name of mortgagee ] (the Mortgagee ), the hire and all other sums and amounts due and payable to us from you under the charter agreement dated [ insert date ] for the Ship, as amended from time to time (the Charter ), have been duly assigned to the Mortgagee...