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Should we redistribute in insolvency

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  • John Armour
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    Abstract

    The characterisation of a security interest as 'fixed' or 'floating' has generated much litigation in English courts. This is because a floating charge is subordinated by statute to other claims in the debtor's insolvency, whereas a fixed charge is not. This paper uses the example of the floating charge to argue that such statutory redistribution between claimants in corporate insolvency is generally undesirable.

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    File URL: http://www.cbr.cam.ac.uk/pdf/WP319.pdf
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    Bibliographic Info

    Paper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp319.

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    Length:
    Date of creation: Mar 2006
    Date of revision:
    Handle: RePEc:cbr:cbrwps:wp319

    Note: PRO-2
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    Web page: http://www.cbr.cam.ac.uk/

    Related research

    Keywords: corporate insolvency; law and finance; history of floating charge; bankruptcy priorities; secured credit.;

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    Cited by:
    1. John Armour & Audrey Hsu & Adrian Walters, 2006. "The costs and benefits of secured creditor control in bankruptcy: Evidence from the UK," ESRC Centre for Business Research - Working Papers wp332, ESRC Centre for Business Research.
    2. John Armour, 2008. "The Law and Economics Debate about Secured Lending: Lessons for European LawMaking?," ESRC Centre for Business Research - Working Papers wp362, ESRC Centre for Business Research.

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