- Derek FrenchDerek FrenchFreelance editor and writer in business and legal publishing for over 30 years
This chapter considers borrowing as an important method of financing a company’s activities, and security as a right of recourse against company property if the loan is not repaid on time. It begins by discussing security for financial obligations, paying particular attention to security contracts, the redemption or discharge of security and the realisation of security. It then turns to the registration of non-possessory security contracts, the priorities of legal and equitable charges and floating charges as a form of security and their crystallisation. The extent to which the assets of a company, to which anyone is considering extending credit, are already charged as security is also explained. The chapter considers three particularly significant court cases: Evans v Rival Granite Quarries Ltd  2 KB 979; Re Spectrum Plus Ltd  UKHL 41,  2 AC 680; and Re Yorkshire Woolcombers Association Ltd  2 Ch 284.