Week 12 - Fixed Charge Holders

Question 1

Fixed charge providers the creditor with…

Answer 1

Both a contractual right (to the repayment of the loan) but also a property interest (in the asset used as security)

Question 2

What does the charge holder use their property right to do?

Answer 2

Claim the asset and remove it from the ‘pot’ of assets available to the liquidator

Question 3

Who are fixed charge holders?

Answer 3

People who have their contractual right to be paid back first - took least risky option of asking for a property interest in something within the business

Question 4

Why are fixed charges outside the statutory order of distribution?

Answer 4

They need not rely on the liquidator to obtain satisfaction