International Banking Law - Essay Example

Topic: International Banking Law Introduction Companies take loan from banks and other financial s mainly at the start of the business as a start-up capital or when it plans expansion and diversification. Banks consider various factors before loaning out to companies. There are certain basic things to be followed, while considering commercial loans. Foremost among them are, 1) it is better to make short-term loans, 2) to see that the money that has been loaned can be easily converted to cash, 3) to avail of the detailed knowledge of the credit position of the borrower and the details of the business before loaning out money and 4) to ensure that the collateral consists of saleable securities or drafts that are easily converted into cash. [1] This essay shall look into the fictitious situation where an online company selling books is loaning a sum of money from a bank to expand and diversify their online operations. The essay attempts to advise the bank in dealing with the loan situation. The situation has therefore been viewed from the bank's perspective. The essay has been dealt with in two parts. Why Should the Bank Give a Loan and not an Overdraft Before any legal advice is given to Spring Bank regarding the type of loan and form of security, it is important to break down the situation. To do this a few concepts have to be cleared. Since giving an overdraft to Winter Ltd. is an option open to Spring Bank, one must consider what an overdraft is and when is an overdraft usually given by a bank. An overdraft is the amount of money that can be overdrawn from a current account, subject to a limit already agreed with the bank. There are certain facilities of an overdraft. With an overdraft, you pay money for the amount of money you use and only for the period you use. For example, an overdraft can be drawn to pay the supplier and within a week the money can be again deposited into the account, after the money comes from the buyers. Overdraft is thus an efficient form of borrowing, usually made to tide over short-term cash-flow fluctuations. Since interest is calculated daily on the fluctuating outstanding balance and is normally charged at the end of each month, there is flexibility. [2] [3] [4] However, in the case of Winter Ltd, the company is not looking for money to make some business payment, which cannot be accommodated from the available cash balance in their current account. It is looking for money for business diversification, which requires a permanent source of financing rather than short-term financing. So, Spring Bank should not agree to an overdraft facility but should give a term loan, as advised by their risk committee. Now, that it has been clearly established that Spring Bank will give Winter Ltd. a loan to diversify its business, one has to look at the loan options that the bank can offer the company. The advantages of giving a loan is that both the business and the bank will know the exact terms of repayment and the amount of interest to be paid and when. The Loan Options that the Bank will Consider Let's now consider the various loan options available to the bank. Banks are conservative lending bodies. A bank loan will be available usually against a security. This brings us to a broad categorisation of loans into 'secured' and 'unsecured.' A 'secured loan' is a promise to pay a debt, where the promise is 'secured' by granting the creditor an interest in specific property or collateral of the debtor. In the case where a debtor does not pay the loan in time, the creditor has the right to seize the property that has been kept as collateral, and recoup the loan. Though an 'unsecured loan' also promises to pay the debt, the promise does not include giving the creditor any interest in a particular property. In case of an unsecured loan the lender relies on the fact that the borrower is credit worthy and can be trusted. Particularly for small businesses (though it has not been specifically mentioned that Winter Ltd. is a small business, one can assume such as it is a company selling books on the Internet and is looking for money to diversify and expand its business), lenders will usually require that both long- and short-term loans be secured with adequate collateral. [5] So, Spring Bank should only consider giving Winter Ltd. a secured loan. Banks commonly give certain type of loans to small and medium sized businesses. Here, each loan will be described and analysed, to narrow down to the particular type of loan that should be given by Spring Bank. Let's start with the 'working capital lines of credit.' When a maximum amount of credit limit is set, as available from the bank, for use as the working capital or other cash requirements of the business, then it is called a line of credit. These credit lines cover renewable periods ranging from 90 days to a period of several years; however this extension of the time period is only allowed after the lender reviews the case annually. Generally floating interest rates are charged in these cases and the interests are paid only on the balance that is outstanding. The money that is taken as loan is used for supporting daily business operations. From a lender's perspective, the adequacy of the borrower's cash flow is the most critical consideration. The bank may, however, charge a commitment fee for the line of credit that it gives to the borrower. This fee may be charged even if the borrower never utilises the full amount of the credit line. Though it is common for lenders to wish a zero balance, at least once annually, this is often not adhered strictly if the lender goes on receiving the interest timely. [6] So, if Winter Ltd. goes on paying timely interest, then the bank can consider such a loan, though there is always the risk that continued lines of credit become indefinite term loans that become a risk to both the bank and the business. The second type of loan is 'credit cards.' Often the use of a credit card instead of a line of credit is preferred. Many card issuers such as VISA International, American Express, and MasterCard International - have adopted small business card programs. Though revolving credit cards can be a quick source of fund and can be hassle-free, the amount is limited. However, their convenience is costly. The cards typically offer an interest rate slightly less than the rate on individual consumer cards and have lending limits that average just over $15,000. The borrower has to present both a personal and business credit history when applying for the cards. [7] In the case of Winter Ltd., this will not be a good lending option by the bank, as the business and personal credit history of the borrower is not known and most importantly the amount of money that Winter Ltd. wants to borrow is 2 million pounds, much above the limit of the credit card. Next, we will consider 'short-term commercial loans.' These types of loans can be used just as a line of credit, with the exception that short-term commercial loans are usually taken for specific expenses, where the borrower loans a fixed sum of money for a specific time and the interest paid is on the total loan. For nearly all startup businesses, and most existing businesses, a short-term commercial loan from a bank will have to be secured by adequate collateral. In this case, the lender will be keen on knowing the cash flow and the sales history of the business. A fixed interest rate may be available because the duration of the loan, and therefore the risk of rising rates, is limited. While some short-term loans have terms as brief as 90-120 days, the loans may extend one to three years for certain purposes. Such loans can have fixed assets, inventory, etc., as security. For startups and relatively new small businesses, most bank loans will be short-term. Rarely will a conservative lender like a bank extend a commercial loan to this type of borrower for more than a one- to five-year maturity. Exceptions may exist for loans collateralized by real estate or for third-party guaranteed loans. [8] In the case of Winter Ltd., a short-term commercial loan is not the option that the bank will look at, as this Internet-based book business will not be able to provide a cash flow and regular sales history like a brick and mortar store. Also, with fixed rates and no fixed asset to be kept as collateral, the bank will not consider this a good business proposition. The fourth loan option for the bank is a 'long-term commercial loan.' These loans are made usually for a time period of more than one year to three years, and mostly not available for small businesses. This is because a long loan-term implies a higher risk for the bank. What actually happens is that the banks think that a small business may not be solvent for a period of say 10 years, in which case the banks require collateral against the loan and limits the loan period. However, as it is with all cases, a longer term of loan can be agreed upon through negotiation. The purposes for longer commercial loans vary greatly, from purchases of major equipment and plant facilities to business expansion or acquisition costs. These loans are usually secured by the asset being acquired and financial loan covenants are regularly required. [9] In the case of Winter Ltd., Spring Bank may consider a long-term loan on the basis of keeping its 'intellectual property' and 'book debt,' as security. Though a small business, Winter Ltd. is a seller of books and the demand for its commodity is mostly unaffected, as the consumer is concentrated in a niche sector. Also, being a medium-priced commodity, the solvency of the business is less in doubt, in the long-run. The next option we will consider is 'equipment leasing.' This loan is given by banks to borrowers to loan equipment. The borrower can loan the money from the bank and then use to lease equipment from another company or they can lease the equipment from a company that is a bank subsidiary. In either case, the loan period is tied to the term of the lease. Banks will mostly look at the operating history of the business before agreing to leasing. [10] In our present case, such a loan is not applicable. The sixth loan type that the bank may consider is 'letters of credit.' This type of loan is usually taken by businesses that are occupied with international trade. Small businesses are not normally financed through this process. A letter of credit or LC guarantees or is the proof that contract between the borrower and the lender is complete. They are basically two-way IOUs often used to facilitate international credit purchases. [11] Again in our present case, such a loan is not applicable. So, either of the two types of loan - working capital lines of credit or long-term commercial loan may be considered by Spring Bank for lending to Winter Ltd. Let's now find out what will be a better option - a fixed or a floating charge. Should the Bank Consider a Fixed or a Floating Charge When determining if a charge is fixed or floating, it does not matter that the actual collateral may change from time to time. [12] A fixed charge is a charge that attaches to a particular identifiable asset, which means that the borrower may not dispose of the asset without permission from the lender. [13] Fixed charges currently may be created over 'a changing pool of assets.' [12] A floating charge is a charge that does not initially attach to a particular asset which means the borrower is allowed to dispose of the assets as he or she wishes without having to get the consent of the lender. [12] The difference between a fixed and floating charge over book debts, and the legal ramifications of such a distinction, have a significant impact on the lender's rights to the charged collateral. [14] Fixed charges are considered especially beneficial because they give the creditor priority over preferential creditors [15] and holders of floating charges when the borrower defaults. [16] In the eyes of a bank granting businesses loans, the most obvious negative feature of a floating charge is that floating charges are paid only after fixed charges and preferential creditors have been paid. [17] Floating charges, on the other hand, are more likely to be set aside than fixed charges during a liquidation as a result of 245 Insolvency Act of 1986. [18] That act allows for floating charges created within 12 months of the company becoming insolvent to be set aside. [19] A fixed charge over book debts gives a bank a great deal of power over a company. [20] As book debts are usually the primary asset of a company [21], having them for security increases the lender's chances of recovering its money, which is one of the reasons for taking security. [20] When a bank has this type of security, the bank has control over a very valuable asset that provides the working capital for the company. [20] As the security is very important to the company, it gives an incentive to not default because the borrower's failure to pay would result in the loss of a crucial asset. [12] Also, when a company enters financial distress, the bank is able to wield a great deal of power and force the company to do a variety of things, including a restructuring of management or anything else the bank may think will save the company from insolvency. [22] Holders of a fixed charge also have self-help remedies that are not available to those with a floating charge. [23] Considering all this, a fixed charge works better for the bank. Let's now come to the final point; what type of security should Spring Bank be looking at when considering the loan amount to Winter Ltd What Type of Security Should the Bank Consider for Winter Ltd. Secured loan needs a 'security' usually in the form of fixed asset of the borrower. Winter Ltd. does not have a fixed asset in the form of an office or house that it owns. Its business is carried on from a property that is on a short-term commercial lease and as such cannot be considered as security for any type of loan. However, the company has intellectual property (in its book sale software) and the book debts (owed by credit card companies whose card-holders have bought over the Internet).Hence the bank will have to consider this intellectual property as the security for the loan. The UK Intellectual Property Office has registers of patents, trademarks and registered designs, which can be checked free of charge by lenders at www.ipo.gov.uk. These registers hold details about the nature of the IPR, ownership, etc. The main reason why banks prefer registered intellectual property, as security, is that they are able to check the records. The bank should undertake a due diligence exercise with three objectives - 1) identify the IPR, 2) check its validity and 3) assess its importance to the business and its realisable value. Te bank can also check the borrower's details at www.companieshouse.gov.uk for previously registered rights which may need to be investigated/cleared. The bank should also consider practical issues before loaning money. One of the most important things to check is that the registration period of the intellectual rights does not expire during the term of the loan. The bank should also ensure that all fees for the maintenance of registered rights have been paid. If not, there is the risk that trademarks may expire. Banks should also take expert advice to check the strength of the intellectual property being offered as security, particularly for a high value of loan. [24] So, the intellectual Property of Winter Ltd. can be accepted as security by Spring Bank, after careful assessment of the same. Conclusion Though lenders will always prefer fixed assets as security, intellectual property can also prove to be a good option if a realistic approach is taken during due diligence and valuation. Currently the importance of knowledge-driven economy is gaining popularity in the UK and based on that borrowers will be more confident to offer IPR as security and lenders will be more comfortable taking such security. [24] Spring Bank can loan Winter Ltd money for diversification and expansion and can offer the business a working capital lines of credit or long-term commercial loan, at a fixed charge, with its intellectual property as security, of course after careful scrutiny of the said intellectual property has been made. However, Spring Bank has in reality given a loan with a floating charge and has discovered that Winter Ltd. has actually utilised part of the money in acquiring software and hardware, thereby breaching the loan agreement. The bank is considering various options open to it for handling this situation, considering that the company does have worthy assets. Before venturing on answering this question, let's consider the following case of one Mr. Reid against the National Westminster Bank. The Case - National Westminster Bank against Mr. Reid [25] Mr Reid bought a small farm called Weachley Farm at Bromlow in Shropshire, in 1979. It was about 35 acres and the farmhouse itself was derelict. He had some 16 to 18 cattle at that time, and by 1983 he and his family were living in a caravan in the area and building up their herd. In 1985 he came to the conclusion that it would be more advantageous to sell his land in Shropshire and to move to Scotland. In 1986 he sold his milk quota and nine acres of land. That left him with 26 acres, a derelict farm and some farm buildings. Then he decided to renovate the farmhouse and make it into a four bedroom house. He went with some plans, to that effect, to the National Westminster Bank at Welshpool, where the manager was Mr. Williams. That was on the 8th of September, 1986. He had an account with the bank, which at that time was overdrawn by 1. He told the bank that he had 30 cattle, 29 of them in calf, and that he planned to renovate the house; he also proposed to sell the house in July of the following year when he hoped, having renovated it, to get something in the region of 120 to 130,000. The bank manager was interested in helping and said he would come and look at the land. On the 18th November 1986, when the credit balance in Mr. Reid's account was 2,985, Mr. Reid produced an estimate of 22,000 plus Value Added Tax as the cost of renovations. The bank agreed to help, subject to a charge over the deeds in respect of the land. Thereafter, on the 15th December 1986, the bank manager again saw Mr. Reid (at that time his account was still in credit approximately to the tune of 2,810), and he told the bank manager that he would be beginning work on the house in the next week. The bank at that time had it in mind to set up a loan account to cover the building costs, and the proposal was that Mr. Reid, from time to time, would advise as to the money spent on building costs and then that sum would be transferred from the loan account, to his current account. By the end of the year the position, so far as the account was concerned, had changed somewhat; the account was overdrawn to the extent of nearly 2,000 (1,892, to be precise). Mr. Williams noted that state of affairs but also noted that Mr. Reid would probably be paying for materials which, in the circumstances, would seem sensible, as Mr. Reid had told Mr. Williams that the work would be beginning in that month of December. Mr. Williams place was taken by Mr. Roberts in the end of the month of December; by the early part of the following year, 1987, the account had become overdrawn to the extent of 7,548. It seemed that a part of that sum (4,500) had been spent on alterations, but the remainder had been spent on the farm as the working capital. Mr. Roberts, was not pleased with this situation. By the 4th March, 1987, the overdraft had risen to 10,193, and a letter was written to Mr. Reid indicating it must be contained. Five days later, on the 9th March 1987, Mr. Roberts went to visit the farm and was obviously unhappy about what he saw there. He came to the conclusion that a large amount of money, relatively speaking, had been spent on working capital on the farm; and on the 16th March, 1987, he wrote a letter to Mr. Reid indicating that there was no arrangement to overdraw, in order to provide working capital. In dealing with the matter the learned judge commented, among other things, "Mr. Williams on behalf of the bank entered into a contract whereby the bank undertook to lend the money to Mr. Reid for the purpose of the renovation of the house and for no other purpose. The bank, I find, was not agreeing to lend money to Mr. Reid for any other purpose or to pay for any other costs. In particular I find the bank was not agreeing to lend Mr. Reid money for the purpose of running his farming business." Mr. Reid could only overdraw from his account for paying renovation costs, as agreed with the bank, said the Judge. [25] The case just proves the point in our present situation; Winter Ltd. used some of the funds, which it got as a loan from Spring Bank, to buy hardware and software to print books on demand, instead of using it for diversification and expansion of its business, as proposed to the bank while applying for loan. So, in effect Winter Ltd. used the money for a purpose other than what they took the loan for. Hence the company had in a way breached a borrower's obligation. Did Spring Bank make a Mistake The bank made a mistake in giving out a floating loan. Here reference can be given of the Spectrum case with the National Westminster Bank; Lord Scott in distinguishing a fixed and floating charge says, "the essential characteristic of a floating charge, the characteristic that distinguishes it from a fixed charge, is that the asset subject to the charge is not finally appropriated as a security for the payment of the debt until the occurrence of some future event. In the meantime the chargor is left free to use the charged asset and to remove it from the security." Lord Walker, on the same matter, opined, "Under a fixed charge the assets charged as security are permanently appropriated to the payment of the sum charged, in such a way as to give the chargee a proprietary interest in the assets. Under a floating charge, by contrast, the chargee does not have the same power to control the security for its own benefit." [26] Spring Bank would have been more secure in this case with a fixed charge. What Can Spring Bank do under these Circumstances 1. What is the best option - Receiver or an Administrator A company can borrow money from the bank only by giving a debenture, which acts as the security for the loan. If the borrower defaults in repaying the loan, the debenture gives power to the bank. In case the company falls into financial trouble, the bank can also opt for 'foreclose.' It is the constant fear of company directors that the banks are waiting to appoint a receiver should anything go wrong. [28] In the case of Winter Ltd. Spring Bank fears that the company will not be able to repay. However, this fear is not justified in the view that the bank also knows that Winter's intellectual property is valued at more than 2 million pounds and also the company had a high-interest account with the bank, even before the loan was negotiated. Hence, the company cannot be said to be in financial difficulty and this is not a situation for foreclosure. Now let's examine what the law says about the appointment of a receiver. Before the Enterprise Act (EA) was passed in 2002, it was the practice that 'receivers' acted on behalf of the floating charge holders to realise as much as possible to satisfy the debt due to the floating charge holder (commonly a bank). If the receiver acts properly, he is not expected to look into the interest of unsecured creditors, unless of course the creditors have a preferential status. However, the law changed with effect from 15 September, 2003, and floating charge holders became 'qualifying floating charge holders.' The qualifying floating charge holders were allowed to appoint an 'administrator,' instead of the old style receiver. Before 2003, what used to be a common recovery tool for the banks, has now been mostly replaced by the appointment of an administrator as a recovery tool. [27] In the case where a company defaults and does not pay the loan amount or do not adhere to the terms and conditions of the loan agreement, the qualifying floating charge holder has the right to appoint an 'administrator.' The administrator is considered to be an officer of the court even if the court does not appoint him. The administrator should also be a qualified insolvency practitioner. However, it should be kept in mind that since the concept of receivership is no longer employable, the qualifying floating charge holder does not have any power to veto the appointment of an administrator and appoint a receiver. This course of events may make it look that the banks as floating charge holders are not as well protected as they were once. However, the government in its effort to make the new rules acceptable and popular to banks and other floating charge holders, have also implemented the clause that in case of qualifying floating charges created before 15 September, 2003, the holder will have the right to appoint the old-style receivers. [27] It is not known when the case of Spring Bank and Winter Ltd. was negotiated, if it happened before 2003, then Spring Bank can appoint a receiver. However, if not, then an administrator can be appointed. To appoint an administrator the qualifying floating charge holder does not have to first prove that the company is or is likely to be unable to pay its debts; so the question of Winter Ltd. not being able to pay does not hold any significance regarding the appointment of an administrator. All that is required is that the bank has to be satisfied in its evaluation that the administration is in all likelihood capable of achieving its purposes and if required a two-day notice would be given. This allows floating charge holders some time and advantage to take an action before the company becomes insolvent, if at all. Though the appointment of the administrator is an out of court process, still the qualifying floating charge holder is required to file a notice with the court and make a statutory declaration with the court, to indicate that the administrator has been appointed. [27] Though the former advantages of being a floating charge holder is being lost, the banks are also gaining the benefits of appointing an administrator, that too without requiring to prove that the company which has taken the loan will not be able to pay the debts. This benefit will be realised to the banks, if necessary, within a notice period of two days. In a way the banks as floating charge holders are quite well off as they can take steps to protect their interest even before a company has been declared insolvent. The bank can also apply for an administrator of its choice, even in a situation where the company is declared to be in liquidation, a situation which would normally not entertain an administrator request. [27] Hence, even if Spring Bank's assumption that Winter Ltd. will not be able to pay its debts is true, the bank has the option of appointing the administrator. 2. Should there be a Step-in by the Bank The collateral warranties contain the contractual agreement regarding the provision of a 'step-in' by a bank. These collateral warranties are given to the bank by the employees' right at the beginning of the project. So, even if the borrower is not in the picture or has gone into administration, the bank will still have a connection with the employees of the borrower and this would give the bank a comfortable assurance that it still retains the collaterals and that these are operational. [29] Going by this argument, all professionals associated with Winter Ltd. should have been involved in the loan agreement with Spring Bank. However, in the case study provided, it has not been specifically mentioned if the company professionals were also involved in providing the collaterals to the bank. Such an arrangement with the company professionals are relevant in a situation where a breach of the borrower's obligations arises. In that case the bank has the ability to take over the role of the borrower 'as employer,' provided that the warranties given to it all contain the relevant 'step-in' provisions. In the case of Spring Bank, it is not known if the bank enforced such a loan agreement, to take over in case of a breach in agreement. In a 'step in' situation, the basic idea is that the bank can keep control of its investment. This will increase the costs to the bank, as the bank will now have to pay for the professional team of the borrower. If the bank decides to exercise their right to step-in, there will be a number of effects on the bank - 1) from the day that the bank serves the notice to the borrowers team that it is intending to 'step-in,' the bank has to pay the employees in place of the borrower, 2) the bank will also have to pay the employees all the outstanding dues, when it steps in and 3) the bank is also required to fulfill the non-monetary obligations of the borrower. [29] So, if we assume that Spring Bank, in fact, had taken care to include 'step in' provisions in its loan agreement with Winter Ltd., then the bank can 'step in,' if necessary, provided it is ready to fulfill the company's monetary and non-monetary obligations. On the other hand, the bank may not want or have the experience or the will to act in the borrower's place. There are two options open to the bank in this case - 1) the bank can give the documents to a third party. However, the bank can only do this if the documents do not have any specific instruction against assignation. Or 2) the bank steps in but after that appoints another person or nominee such as a project manager, to act on the behalf of the bank. In this way the bank can ensure full control of the company but at the same time not take the day-to-day hassles of running the project. However, when it appoints the nominee the bank becomes the guarantor and pays all the fees and expenses incurred by the nominee. [29] Spring Bank may opt for this option, if it does not desire to assume responsibilities on its own. A 'step-in' is a rare occurrence, as banks prefer not to be closely associated in a business process. The only good thing about it is that banks hold it as a comfort tool to be used only when other options are exhausted. [29] 3. Is a Corporate Loan Valid without the Approval of the Board In the case where a loan, quasi-loan, credit transaction or related arrangement has been made but the members of the company have not approved it, even then the transaction may be voidable (valid), provided the company requests for the same. Any director of the company who authorised the transaction is legally responsible and has to cover the company in case of any loss. However, if the company subsequently gives an agreement to the transaction then the director is not held responsible. There is no penalty like in a criminal offence (something that the old law had). [30] Hence, even if the board of Winter Ltd. did not approve of the loan, the loan transaction is not invalid. Conclusion Though the ideal situation for a bank loaning out to a commercial venture is a short-term loan with fixed charge, sometime banks take discretionary steps depending on the credibility of the client. However, even in such cases the loaning official should carefully look into the interests of the bank before signing the dotted line. Reference List 1. [Internet] (Updated NA) Available at: http://chestofbooks.com/finance/private/Business/Factors-Considered-By-Banks-In-Making-Loans.html [Accessed 11 Jan 2010.] 2. HSBC. Corporate Banking. [Internet] (Updated NA) Available at: http://www.hsbc.co.in/1/2/corporate/corporate-banking/overdraft [Accessed 11 Jan 2010.] 3. Business Overdraft [Internet] (Updated NA) Available at: http://www.westpac.com.au/business-banking/loans-leasing/short-term-finance/overdraft-credit/ [Accessed 11 Jan 2010.] 4. Overdraft financing. 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A Wide Spectrum of Views, LEGAL RISK IN THE FIN. SECTOR NEWSLETTER, (Clifford Chance, L.L.P., London, Eng.), July 2004 22. Id. at 10 23. Anthony Fanshawe & Kate Shimmin, 2004 24. Journal of International Banking & Financial Law/2007 Volume 22/Issue 6, June/Articles/Taking security over intellectual property -- a pragmatic approach to releasing value from hidden assets. 01 June 2007. 6 JIBFL 320. Jeremy Drew, Matthew Starmer. 25. John Stuart Reid v National Westminster Bank Plc. QBENF 98/1139/A2 Court of Appeal (Civil Division). 22 October 1999. Sweet & Maxwell 2010 Thomson Reuters (Legal) Limited. 26. The cuckoo in the nest of corporate insolvency: some aspects of the Spectrum case. Legal Journals Index2009 Sweet & Maxwell. Alan Berg. J.B.L. 2006, Jan, 22-51 Publication Date: 2006. 27. The Enterprise Act 2002. Scots Law Times 2004. Nicholas Grier. Sweet & Maxwell 2009 Thomson Reuters (Legal) Limited. 28. Company Rescue. Company Receivership. [Internet] (Updated NA) Available at: http://www.companyrescue.co.uk/company-rescue/options/receivership.aspx [Accessed 11 Jan 2010.] 29. United Kingdom: Collateral Warranties And Step-In: What A Bank Should Know. Ian McCann [Internet] (Updated 19 June 2009) Available at: http://www.mondaq.com/article.asparticleid=81512 [Accessed 11 Jan 2010.] 30. Companies Act 2006 - Article 02. [Internet] (Updated NA) Available at: http://www.companylawclub.co.uk/topics/faq302.htm [Accessed 11 Jan 2010.] Read More