Article 38 Secured debtsI1

A secured creditor shall deduct the estimated value of any security in calculating the amount of the secured creditor’s claim;

Provided that if a secured creditor surrenders, or undertakes in writing to surrender, a security for the benefit of the company’s assets, that secured creditor shall not be required to make a deduction of the value of that security.

The postal administrator may, at any time after the expiry of 12 weeks from the date on which the company enters postal administration, require a secured creditor to discharge the security or convey or assign it to the postal administrator on payment to the creditor of the value specified by the creditor (the expense of such discharge, conveyance or assignation being met from the assets of the company); and the amount in respect of which the creditor shall then be entitled to claim shall be any balance of the creditor’s debt remaining after receipt of such payment.

In calculating the amount of the creditor’s claim, a creditor whose security has been realised shall deduct the amount (less the expenses of realisation) which that creditor has received, or is entitled to receive, from the realisation.