SRA Samples
A company created a floating charge over all its assets in favour of a trade supplier as security for sums due occasionally.
Five years later, the same company entered into a debenture with a bank, creating a floating charge over all the company's assets as security for a loan from the bank.
The trade supplier’s charge was not registered at Companies House. However, before the debenture was signed, the company notified the bank that the trade supplier had already held a valid floating charge over the company’s assets. The debenture was duly executed and was immediately registered at Companies House. The company went into administration ten months after entering the debenture, with outstanding sums due and unpaid to the trade supplier and the bank.
Which company creditor has a prior claim to the company’s assets?
A company created a floating charge over all its assets in favour of a trade supplier as security for sums due occasionally.
Five years later, the same company entered into a debenture with a bank, creating a floating charge over all the company's assets as security for a loan from the bank.
The trade supplier’s charge was not registered at Companies House. However, before the debenture was signed, the company notified the bank that the trade supplier had already held a valid floating charge over the company’s assets. The debenture was duly executed and was immediately registered at Companies House. The company went into administration ten months after entering the debenture, with outstanding sums due and unpaid to the trade supplier and the bank.
Which company creditor has a prior claim to the company’s assets?
The bank, because the trade supplier’s failure to register its charge makes the charge void against the administrator and the bank.
C - The bank, because the trade supplier’s failure to register its charge makes the charge void against the administrator and the bank.
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