ALBA 2007 – 1 plc - Irish Stock Exchange

eceiver, such holder may prevent the appointment of an administrator (either by the new out-of-court
route or by the court based procedure) by appointing an administrative receiver prior to the appointment
of the administrator being completed.
The new provisions of the Insolvency Act give primary emphasis to the rescue of a company as a going
concern and achieving a better result for the creditors as a whole. The purpose of realising property to
make a distribution to secured parties is secondary. No assurance can be given that the primary
purpose of the new provisions will not conflict with the interests of Noteholders or the
Instrumentholders were the Issuer ever subject to administration.
The Enterprise Act also removes the Crown's preferential rights in all insolvencies (section 251) and
makes provisions to ensure that unsecured parties take the benefits of this change (section 252). Under
this latter provision the unsecured parties will have recourse to the floating charge assets up to a fixed
amount (the "prescribed part") in priority to the holder of the floating charge concerned. The
prescribed part will be 50 per cent. of the first £10,000 of floating charge assets; then 20 per cent. of
the remaining floating charge assets until the prescribed part reaches a maximum of £600,000. The
obligation on the insolvency officeholder to set aside the prescribed part for unsecured parties does not
apply if the floating charge realisations are less than £100,000 and the officeholder is of the view that
the costs of making a distribution to unsecured parties would be disproportionate to the benefits. The
prescribed part will apply to all floating charges created on or after 15 September 2003 regardless as to
whether they fall within one of the exceptions or not.
Fixed Charges over Accounts May Take Effect under English Law as Floating Charges
The Issuer will purport to grant, inter alia, fixed charges in favour of the Trustee over the Issuer's
interest in the Issuer Transaction Account and any other bank account in which the Issuer has an
interest.
The law in England and Wales relating to the re-characterisation of fixed charges is unsettled. The
fixed charges purported to be granted by the Issuer (other than by way of assignment in security) may
take effect under English law as floating charges only, if, for example, it is determined that the Trustee
does not exert sufficient control over the relevant account or the proceeds thereof for the security to be
said to "fix" over those assets. If the charges take effect as floating charges instead of fixed charges
then certain matters, which are given priority over the floating charge by law, will be given priority
over the claims of the floating chargeholder. See "The Enterprise Act 2002".
The Issuer believes that the risks described above are the principal risks for the Noteholders and the
Instrumentholders inherent in the transaction, but the inability of the Issuer to pay interest, principal or
other amounts on or in connection with the Notes and Instruments may occur for other reasons. The
Issuer does not represent that the above stated risk factors are exhaustive. The Issuer believes that the
structural elements described elsewhere in this Prospectus go to mitigate a number of these risks for the
Noteholders and the Instrumentholders, nevertheless the Issuer cannot give any assurance that those will
be sufficient to ensure timely payment of interest, principal or any other amounts on or in connection
with the Notes or Instruments to Noteholders or Instrumentholders.