What is left of the Floating Charge?

Akintola, Kayode (2016) What is left of the Floating Charge? PhD thesis, University of Nottingham.

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The proliferation of the corporate form has resulted in a state of dependency by the economy on the companies operating within it. These companies require the free flow of capital for investment, growth, and avoidance of precipitate insolvency. For over a century, the floating charge has played a cardinal role in the provision of credit to companies in the UK. Over the same period, the charge has undergone several statutory interventions raising doubts as to the ability of financiers to rely on the charge as a basis for extending and securing credit. This thesis explores the impact of some of these changes on lending practices and insolvency outcomes. The changes examined primarily relate to the redistribution of floating charge assets in favour of other creditors in insolvency.

The thesis uses analytical and empirical research methods. There are six chapters in the thesis. Chapters 1 and 2 provide a commercial background to the study and identify the research question; they explore the impact of companies on the economy, and the importance of credit and security. Chapter 3 contains an empirical account of the impact that the treatment of the floating charge in insolvency has on lending practices and insolvency outcomes. Chapter 4 examines the interest conferred by a floating charge against current inroads into the rights of a floating chargee. Chapter 5 scrutinises the raison d’être for redistributing floating charge assets. Chapter 6 concludes the thesis by providing analytical commentary on proposals regarding the future of the floating charge and factoring. This is followed by a Postscript which summarises the arguments and evidence contained in the thesis, and sets out a number of recommendations.

The thesis will show that the floating charge is still used in corporate finance transactions. Proposals to unify company security interests would not affect this. However there are noticeable alterations in lending practices, partly devised as a response to the treatment of the floating charge. These alterations sometimes have adverse effects on insolvency outcomes. Overall, it argues that the treatment of the floating charge lacks sound justification, and, in certain respects, fails in its objectives.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Frisby, Sandra
Rotherham, Craig
Keywords: Floating Charge; Insolvency; Secured Transactions; Corporate Finance; Banking; Factoring
Subjects: K Law > KD England and Wales
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > School of Law
Item ID: 33313
Depositing User: Akintola, Kayode
Date Deposited: 19 Aug 2016 14:47
Last Modified: 14 Sep 2016 02:06
URI: http://eprints.nottingham.ac.uk/id/eprint/33313

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