Jurisdiction(s):
Ireland

Precedent non-crystallisation letter: chargee confirmation and consent to sale or second floating charge over assets subject to an existing floating charge

Published by a Lexis+ Ireland - Banking & Financial Services expert

Precedents

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 belief] no event or step has caused, or would cause, crystallisation.
Consent: sale free of the floating charge, or creation of a second floating charge subject to the existing floating charge.
Execution for the chargee.

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William Johnston

ByrneWallace LLP

William Johnston is an economics graduate of Trinity College Dublin; he qualified as a solicitor while training in McCann FitzGerald LLP and was a partner in Arthur Cox LLP for 30 years where he was head of the Financial Services Department for 16 years and Chair of the Learning and Development Committee for ten years; he is now a Consultant with ByrneWallace LLP; he was Chair of the Law Society’s Business Law Committee for two years and has lectured in the Law Society’s Diploma in Finance Law for 20 years and is currently the Law Society’s external Examiner in Banking Law and the lecturer on legal opinions in the Law Society’s Professional Course; he was a Board member of UCD’s Commercial Law Centre for six years and is a member of the editorial Boards of Commercial Law...

Web page updated on 24/05/2026

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