Regulation 10 Security for priority liquidation distributions

for the purposes of regulation 9 above; and

to ensure that, in the event of the liquidation of the company, a priority liquidation distribution can be paid to all those entitled to such a distribution, in accordance with section 100(6)(b) of the Act (which sets out the priority which the right to that distribution is to confer), before any payment is made in satisfaction of the company’s other liabilities apart from preferential debts.

for the entitlement of members of the society to a priority liquidation distribution to be secured on or before the vesting date by a floating charge on the company’s property or undertaking, and for the charge to be duly registered under Part XII (Registration of Charges) of the Companies Act 1985^f1or Part XIII (Registration of Charges) of the Companies (Northern Ireland) Order 1986^f2;

for the furnishing of a statement by the board of directors of the successor company, supported by the successor company’s auditor, that the floating charge is not rendered to any extent invalid by section 245 (Avoidance of certain floating charges) of the Insolvency Act 1986^f3or in the case of a company registered in Northern Ireland by article 573 (Effect of floating charge) of the Companies (Northern Ireland) Order 1986 or, in the absence of such statement so supported, the taking of such other security as the trustee hereinafter mentioned may reasonably regard as necessary in addition to that floating charge to secure that entitlement;

for the charge referred to in sub-paragraph (a) to be vested in a trustee to hold the same upon trust for the persons entitled to a priority liquidation distribution;

for the appointment of one or more persons independent of the company to be that trustee;

for the terms of the floating charge referred to above to prohibit, or to prohibit without the consent of the trustee thereof, the company from creating any fixed or floating charge or other security over any property of the company ranking in priority to, or pari passu with, the floating charge and to confer on the trustee all the powers necessary to secure that the priority to which section 100(6)(b) of the Act refers is not prejudiced; and

for the terms of the floating charge, where it provides for the consent of the trustee as specified in sub-paragraph (e) above, to require the trustee not to grant such consent save to the extent that he is satisfied that its grant would not be materially prejudicial to the preservation of the priority to which section 100(6)(b) of the Act refers.