Article 13HC Void provisions in floating charge documentsF1

(1)

A provision in an instrument creating a floating charge is void if it provides for the obtaining of a moratorium, or anything done with a view to obtaining a moratorium, to be—

(a)

an event causing the floating charge to crystallise,

(b)

an event causing restrictions which would not otherwise apply to be imposed on the disposal of property by the company, or

(c)

a ground for the appointment of a receiver.

(2)

The reference in paragraph (1) to anything done with a view to obtaining a moratorium includes any preliminary decision or investigation.

(3)

In paragraph (1) “receiver” includes a manager and a person who is appointed both receiver and manager.

(4)

Paragraph (1) does not apply to a provision in an instrument creating a floating charge that is—

(a)

a collateral security (as defined by Article 13DI);

(b)

a market charge (as defined by Article 13DI);

(c)

a security financial collateral arrangement (within the meaning of regulation 3 of the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226));

(d)

a system-charge (as defined by Article 13DI).

Annotations

Textual amendments

F1: Pt. 1A inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 4(1), 49(1) (with ss. 2(2), 5(2))

Notes on Part 1A

Modifications

C1: Pts. 1-5 modified by S.R. 2004/307 (as amended (1.10.2006) by Limited Liability Partnerships (Amendment) Regulations (Northern Ireland) 2006 (S.R. 2006/377), reg. 3, Sch. 2; (temp.) (27.4.2020 retrospective) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 11 para. 8(1)(2), 14 (with ss. 2(2), 5(2)); (26.6.2020) by The Limited Liability Partnerships (Amendment etc.) Regulations 2020 (S.I. 2020/643), reg. 1(1), Sch. 2 (with reg. 3); (16.2.2021) by The Limited Liability Partnerships (Amendment etc.) Regulations 2021 (S.I. 2021/60), reg. 1(1), Sch. 2 (with reg. 4(2)))
C2: Pts. 1-5 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1A para. 3 (as inserted by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), reg. 1(2), Sch. 1)