Creditor Definition

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What does Creditor mean?

A person to whom a debt is owed and who therefore, has a right to claim payment of a sum of money due to him.

A creditor may have a claim of payment against a debtor that is either liquidated or unliquidated. Under Insolvency Rules 1986, r 1.17(3), the term creditor encompasses persons whose claims are unliquidiated or are of uncertain value at the relevant date. The expression 'creditor' includes everyone who has a pecuniary claim against the company, whether actual or contingent and thus includes those entitled to a right to a future payment under an existing valid instrument such as a lease. See, Re Cancol Ltd [1996] 1 All ER 37 by Knox J. Subject to certain statutory conditions being fulfilled, an individual may file a bankruptcy petition as a creditor against a debtor if he has the right to claim immediate payment of a sum of money due to him, or who will at a certain time in the future have such a right and be in a position to give a valid release.

View the related checklists about Creditor

Checklist for compromises of FCA-regulated entities: information requirements

Checklist for compromises of FCA-regulated entities: information requirements The Financial Conduct Authority (FCA) is the conduct regulator for financial services firms and financial markets in the United Kingdom. It has a duty under section 1B of the Financial Services and Markets Act 2000 (FSMA 2000) to pursue certain objectives, one of which is the consumer protection objective. The FCA lists its statutory objectives as to secure an appropriate degree of protection for consumers and to protect and enhance the integrity of UK financial markets, with a view to reducing the number of proposed compromises that they do not consider to be appropriate (see FG22/4, para 1.2). On 5 July 2022, the FCA published guidance on compromises of regulated firms (see FCA Guidance FG22/4 July 2022 and updated in January 2024) following their significant concerns about these tools being proposed and used by firms to avoid paying customers redress (see: LNB News 05/07/2022 72). Practitioners will need to take note of the guidance where the proposed compromise involves regulated companies, meaning...

Bank Recovery and Resolution Directive (BRRD)—timeline [Archived]

Bank Recovery and Resolution Directive (BRRD)—timeline [Archived] Archived:This timeline has been archived. For developments from January 2024 onwards, see EU Bank Recovery and Resolution Directive—timeline if they relate to the EU BRRD, or UK bank recovery and resolution regime—timeline if they relate to the UK bank recovery and resolution regime, For further guidance on the EU BRRD, see Practice Note: Bank Recovery and Resolution Directive (BRRD)—essentials. For further guidance on the UK bank recovery and resolution regime, see Practice Note: The UK bank recovery and resolution regime. Date Source Document Description 20 December 2023 European Banking Authority The EBA publishes amendments to disclosures and reporting on MREL and TLAC The European Banking Authority (EBA) has published its final draft implementing technical standards (ITS) on amendments to disclosure and reporting of the minimum requirement for own funds and eligible liabilities (MREL) and the total loss absorbency requirement (TLAC). The amendments reflect the new requirement to deduct investments in eligible liabilities instruments of entities belonging to the same resolution group, the...

Trading an insolvent company—checklist

Trading an insolvent company—checklist The decision to trade on is not a decision which an insolvency practitioner (IP) can make in isolation. It is important to get commitment to trading on from the other stakeholders who need to be involved. These other stakeholders include: • customers—required to commit to continue to buy from the company • suppliers—required to commit to continue to supply the company • employees—required to commit to carry on their duties with the company, and • potential purchasers—required because without a purchaser the continued trading will not lead to enhanced realisations The checklist below covers most of the key areas that an IP must focus on when trading a business. Good levels of communication and control are essential from day one of a trading job. There are four key words to keep in mind at all times from the moment an IP takes over: • control—establish the whereabouts of all assets/premises • secure—change locks, alarm codes and passwords • insure—notify insurance brokers who insure assets for IPs...

Failure of gifts—ademption

Failure of gifts—ademption When applying the doctrines of ademption and abatement, a distinction is drawn between specific, general and demonstrative legacies. Classification of legacies The different types of legacies were explained in Walford v Walford as follows: 'Legacies are of three kinds: there is the specific legacy which is a specific res secured under the testator's Will on his death; and, of course it does not abate if the rest of the assets are insufficient for the payment of general legacies; but it has this disadvantage, that if the particular res which is the subject of the specific legacy disappears in the meantime then the legatee gets nothing. The class of legacy at the other extreme is a general legacy which comes out of the residence and which abates if the residue is insufficient, but which prima facie, under a rule of administration of the court, carries interest as from a year after the testator's death. There is an intermediate class of legacy, namely a demonstrative...

Discover our 1469 Practice Notes on Creditor

Short-form facility agreement (term loan): single company borrower—bilateral—unsecured

Short-form facility agreement (term loan): single company borrower—bilateral—unsecured Facility agreement This Agreement is made on [date] Parties 1 [insert name of Borrower], a company incorporated in England and Wales with registered number [insert company number] whose registered office is at [insert address] (the Borrower); and 2 [insert name of Lender], of [insert address] (the Lender). It is agreed as follows: 1 Definitions and interpretation 1.1 In this Agreement, unless otherwise provided: Business Day • means a day, other than a Saturday, Sunday or public holiday, on which banks are open for business in London; Commitment • means £[•] ([•] Sterling) minus any amount reduced or cancelled in accordance with this Agreement; Commitment Period • means the period commencing on the date of this Agreement to and including [•]; Default • means an event that with the giving of notice, lapse of time or other applicable condition would be an Event of Default under Clause 16; Drawdown • means [the OR a] utilisation of the...

Resolution approving provision of funds to a director for expenditure on company business

Resolution approving provision of funds to a director for expenditure on company business THAT the directors be authorised to [advance by way of loan OR provide] an amount not exceeding £50,000 when aggregated with the value of all other Relevant Transactions and Arrangements (as defined below) to [insert name of the director] in his capacity as a director of the Company the sum of £[insert amount of funds, not to exceed £50,000 when aggregated with other Relevant Transaction and Arrangements] to furnish him with funds to meet expenditure incurred or to be incurred by him: • for the purposes of the company, or • for the purposes of enabling him properly to perform his duties as an officer of the company In this resolution, Relevant Transactions and Arrangements means: • any Company loan to a director of the Company or its holding company, or any guarantee

Dive into our 193 Precedents related to Creditor

What is the position of a security holder if the company that created the security is dissolved?

What is the position of a security holder if the company that created the security is dissolved? This Q&A focuses on the impact the dissolution of a security provider can have on the ability of a security holder to effectively enforce its security. It also considers the position of a receiver appointed by the security holder prior to the dissolution of the relevant company. Summary If a security provider is dissolved as a matter of English law it is normally still possible for the security holder to enforce the security it holds by exercising the mortgagee’s power of sale. There may be circumstances in any particular case that make an application to restore the dissolved company to the register desirable to protect the security holder’s position. Circumstances where this issue commonly arises The problems associated with a security provider being dissolved while security is in force occur most often in real estate finance and other asset finance transactions. Typically, these issues arise where a special purpose...

What will be the applicable limitation period where a settlement agreement is secured by way of a charging order and the debtor under the agreement subsequently defaults on repayment of the debt, which entitles the creditor to immediate repayment of the whole sum, and the creditor now wishes to enforce their charging order?

What will be the applicable limitation period where a settlement agreement is secured by way of a charging order and the debtor under the agreement subsequently defaults on repayment of the debt, which entitles the creditor to immediate repayment of the whole sum, and the creditor now wishes to enforce their charging order? We have assumed that reference is being made to a charging order. When seeking to enforce the charging order it would have been subject to the previous rules in this area (CPR 73 and CPR PD 73 were amended with the changes coming into force on 6 April 2016). Where such orders charge a beneficial interest under a trust in land, the charge is protected by means of a restriction under the Land Registration Act 2002. We also assume that the charging order was validly obtained. If seeking to apply for an order for sale to enforce a charging order made prior to 6 April 2016 you should still follow the regime set out in the amended...

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Challenge to administrators’ conduct dismissed (Re CJFL Property Partners Ltd; Nardelli v Richardson)

Restructuring & Insolvency analysis: The court dismissed the applicants’ applications to remove and replace the joint administrators. The administrators’ decisions fell within the range of decisions that were open to them, even though further renegotiations with the secured creditor (Desiman) and the purchaser’s ‘chipping’ at the purchase price during turbulent economic conditions eroded the prospect the applicants would receive an economic return in the administration. In that respect, Desiman could be said to have driven a hard commercial bargain, but that was not a circumstance for which the administrators were ultimately responsible. Nor was it sufficient for any of the allegations to be made out. Written by Samuel Parsons, barrister at Erskine Chambers.

Restructuring & Insolvency weekly highlights—19 December 2024

This week's edition of Restructuring & Insolvency weekly highlights includes: the publication by the Insolvency Service of its monthly insolvency statistics for November 2024, an examination of the meaning of ‘unregistered company’ under section 220(1) of the Insolvency Act 1986 (IA 1986) (East Riding of Yorkshire Council v KMG), analysis of the Commercial Court’s guidance on pleading and proving claims under IA 1986, s 423 (Invest Bank PSC v El-Husseini), plus a round-up of other news and cases for restructuring and insolvency professionals.

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