226. Payments of certain debts out of assets subject to floating charge in priority to claims under charge Flashcards
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Q
- Payments of certain debts out of assets subject to floating charge in priority to claims under charge
A
General overview
[226.01] Section 226 contains a list of preferential creditors whose debts rank in priority over the debenture holder in a floating charge. Section 226 applies to a case of the company in a receivership only and not when it is wound up, whether before or after the receiver is appointed. A receiver and manager appointed by debenture holders, who, after notice of preferential claim under s 107 of the Companies (Consolidation) Act 1908 (UK), pays away the company’s assets to ordinary creditors without making or attempting to make any provision for that preferential claim, is guilty of a breach of that section and is liable in damages accordingly: Woods v Winskill [1913] 2 Ch 303, Ch D .
