Bankruptcy and Diligence etc. (Scotland) Act 2007

Prospective

43 Alteration of floating charges S

(1) A document of alteration may alter (whether by addition, deletion or substitution of text or otherwise) the terms of a document granting a floating charge.

(2) If (and in so far as) an alteration to the terms of a document granting a floating charge concerns—

(a) the ranking of the charge with any other floating charge or any fixed security; or

(b) the specification of—

(i) the property that is subject to the charge; or

(ii) the obligations that are secured by the charge,

the alteration is not valid unless subsection (3) below is satisfied.

(3) This subsection is satisfied if the alteration is made by a document of alteration which is—

(a) subscribed by—

(i) the company which granted the charge;

(ii) the holder of the charge; and

(iii) the holder of any other subsisting floating charge, or any subsisting fixed security, which would be adversely affected by the alteration; and

(b) registered in the Register of Floating Charges.

(4) But paragraph (a)(i) of subsection (3) above does not apply in respect of an alteration which—

(a) relates only to the ranking of the floating charge first-mentioned in that subsection with any other floating charge or any fixed security; and

(b) does not adversely affect the interests of the company which granted the charge.

(5) The granting, by the holder of a floating charge, of consent to the release from the scope of the charge of any particular property, or class of property, which is subject to the charge is to be treated as constituting an alteration—

(a) to the terms of the document granting the charge; and

(b) as to the specification of the property that is subject to the charge.

(6) For the purpose of subsection (5) above, property is not to be regarded as released from the scope of a floating charge by reason only of its ceasing to be the property of the company which granted the charge.