Part 9Insolvency etc.

Floating charges

I1430 Floating charges

1

In this section “company” means a company which may be wound up under

a

the 1986 Act, or

b

the 1989 Order.

F52

If a company holds property which is subject to a floating charge, and a receiver has been appointed by or on the application of the holder of the charge, the functions of the receiver are not exercisable in relation to the following property—

a

property for the time being subject to a restraint order which was made under section 41, 120 or 190 before the relevant time;

b

property for the time being detained under or by virtue of section 44A, 47J, 47K, 47M, 47P, 122A, 127J, 127K, 127M, 127P, 193A, 195J, 195K, 195M or 195P;

c

property in respect of which an order under section 50, 128(3) or 198 is in force;

d

property in respect of which an order under section 67A, 131A or 215A is in force.

3

Subsection (2)(a) applies to heritable property in Scotland only if the restraint order is recorded in the General Register of Sasines or registered in the Land Register of Scotland before the appointment of the receiver.

4

If a company holds property which is subject to a floating charge, and a receiver has been appointed by or on the application of the holder of the charge, the powers referred to in subsection (5) must not be exercised in the way mentioned in subsection (6) in relation to any property—

a

which is held by the company, and

b

in relation to which the functions of the receiver are exercisable.

5

These are the powers—

a

the powers conferred on a court by sections 41 to F367B, the powers conferred on an appropriate officer by section 47C and the powers of a receiver appointed under section 48 F1or 50 ;

b

the powers conferred on a court by sections 120 to 136 and Schedule 3 F4, the powers conferred on an appropriate officer by section 127C and the powers of an administrator appointed under section 125 or 128(3);

c

the powers conferred on a court by sections 190 to F6215B, the powers conferred on an appropriate officer by section 195C and the powers of a receiver appointed under section 196 F2or 198 .

6

The powers must not be exercised—

a

so as to inhibit the receiver from exercising his functions for the purpose of distributing property to the company’s creditors;

b

so as to prevent the payment out of any property of expenses (including the remuneration of the receiver) properly incurred in the exercise of his functions in respect of the property.

7

But nothing in the 1986 Act or the 1989 Order must be taken to restrict (or enable the restriction of) the exercise of the powers referred to in subsection (5).

8

In this section “floating charge” includes a floating charge within the meaning of section 462 of the Companies Act 1985 (c. 6).