Company Standstills Where a borrower is in financial difficulty, it is likely that there will be simultaneous triggering of default clauses across facilities with most or all of its lenders. Even if the borrower has not ceased payments on a facility, the default under one facility is usually a default under other facilities, thereby accelerating the obligation to pay (automatically or on demand) and allowing […]
Forbearance and Variation Agreements Apart from issues which might arise from bankruptcy law, there is very little constraint on what might be provided for in a forbearance or variation agreement in relation to an existing loan agreement. The existing loan agreement should be reviewed to ascertain the current position. Care should be taken to ensure that the new agreement does not inadvertently weaken the lender’s […]
Statutory Purpose of NAMA The purpose of NAMA is to address the serious threat to the economy, to secure the stability of credit institutions and to deal with the need for the maintenance and stabilisation of the financial system in the State. In doing this, its further purposes are to address the compelling need:- to resolve the financial crises and achieve a recovery in the […]
Deemed Rights and Mortgagor Restrictions The NAMA legislation includes novel legal provisions which are designed to reduce the risk of mortgagors and other transferors unreasonably frustrating the development potential of the mortgaged property. The provisions are aimed at limiting claims of “ransom” strips and equivalent rights over adjoining land. or otherwise asserting rights which There is deemed to be included in transfers of lands, for […]
Purpose of Security The purpose of security is to ensure that the creditor acquires the right to assets, to which recourse may be had in the event of non-payment. On bankruptcy, all of the debtor’s assets vest in the Official Assignee for the benefit of his creditors generally. Security entitles the creditor to look to the secured assets to satisfy his debt in whole or […]
Charge over Stock The Agricultural Credit Acts were introduced in the early years of the State to facilitate the granting of security principally by farmers over stock, produce and agricultural machinery. In the absence of the legislation, the Bill of Sale (Ireland) Act would have made the creation of a charge over agricultural chattels impractical. Stock includes animal and birds of every kind and their […]
Assets & Possession When an order of appointment of a receiver is made, the court assumes control of the assets. The parties retain possession only as custodians for the court. Monies that would otherwise come into the hands of the receiver may be paid into court. An application may be made to reduce the security proportionately. Similarly, where the scope of the receivership is extended […]
The receiver is entitled to an indemnity against liabilities incurred by him properly. This ranks as the first charge on the assets subject to the cost of realisation and to the receivers’ costs, charges and expenses, including remuneration. Creditors of the receiver are entitled by subrogation to be paid out of assets in priority to pre-appointment creditors. The receiver is liable in respect of pre-appointment […]
A receiver appointed by court is an officer of court. He derives his authority from the court order. The appointment of a receiver by a court does not constitute the appointee an agent of the mortgagor. A receiver appointed by court does not represent the mortgagor in the same way as a receiver appointed out of court, who is deemed agent. Where an order requires […]
In a mortgage of unregistered title land, the mortgagee has a right to take possession. In practice, the mortgagor is generally left in possession. In the case of registered title and post-2009 unregistered title mortgages, the mortgagor has a right to possession unless and until displaced under the terms of the charge. Notwithstanding that in an unregistered title mortgage, the mortgagee is subject to the […]