Titan Europe 2007-1 (NHP) Limited - Irish Stock Exchange

Set-Off. In addition to the above, charges over rights against obligors are subject to rights of set-off
between the obligor and the chargor. Although the giving of notice of the charge to the obligor stops most new
rights of set-off from accruing, rights of set-off which came into existence prior to the giving of notice will take
effective priority over the interests of the chargee. In addition certain rights of set-off which are fundamental to
the contract between the obligor and the chargor will continue to accrue even after the giving of notice.
Enforcement of Security
Enforcement of Security Prior to Administration, Insolvency or Bankruptcy of Charging Entity. There are
three principal methods of enforcing English law non-possessory security; foreclosure, orders of sale and
receivership.
Foreclosure. Under English law only mortgages allow foreclosure as a method of enforcement. In the
context of real property finance, these arise in relation to mortgages of the land itself and mortgages of the
shares of the property-owning company. Enforcement is available to a lender through an application to the
court for an order which vests the property in the lender. Such an order will have the effect of “foreclosing” any
interest that the related mortgagor may have in the related properties. However, in the event that a lender
forecloses on a mortgagor’s interest in a property it may be liable in respect of claims that are typically made
against the owner of such property. Therefore, the foregoing enforcement procedure is generally avoided in
relation to land.
Orders for Sale. A lender secured by a charge (including a floating charge) or a mortgage over any asset
has the right to apply to court for an order for the sale of the charged or mortgaged asset. The proceeds of sale
would be applied in satisfaction of the related chargor’s or mortgagor’s obligations under the related loan
agreement.
Receivership. Following a default under a loan or under the security granted in relation to a loan, a lender
may be able to appoint a receiver, which can be an appointment over the relevant property or over all of the
assets of a corporate borrower. The principal role of a receiver, once appointed, is to obtain satisfaction of the
debt due to the appointing creditor. A summary of the various types of receiver that could be appointed is
outlined in the section “—Administration, Receivership, Insolvency and Bankruptcy Under English Law—
Receivership”.
Enforcement of Security Upon the Administration, Insolvency or Bankruptcy of Charging Entity
Enforcement during English Administration Proceedings of Entity. The effect of the statutory moratorium
in an English administration proceeding of a company from the lender’s perspective is that he is unable to
enforce the security granted by such entity for the duration of the administration without the leave of the court or
the consent of the administrator. This might compromise the interests of the secured creditor. For example, an
administrator may decide that it is in the best interests of the creditors of the borrower to delay the sale of the
secured assets. Also, the administrator will have the ability to sell property subject to security in favour of the
creditors, but must account to the creditor for the proceeds. For more details, see “Administration, Receivership,
Insolvency and Bankruptcy Under English Law—Administrations” below.
Enforcement of Security during English Liquidation of Entity. When a winding up order has been made by
the court in respect of an English company or a provisional liquidator has been appointed, no action or
proceeding shall be proceeded with or commenced against the company or its property, except with leave of the
court and subject to such terms as the court may impose. Specific court orders can be obtained to stay any
actions or proceedings brought against the English company and its property. However, the rights of secured
creditors are unaffected and they may still enforce their security rights, for example by the appointment of a
receiver over specific property or assets of the company. See “Administration, Receivership, Insolvency and
Bankruptcy Under English Law—Liquidation” below.
Enforcement of Security during an English Bankruptcy of an Individual. If English bankruptcy proceedings
are pending or an order has been made, the court may stay any action, execution or other legal process against
the debtor/bankrupt. This does not prevent a secured creditor from enforcing his security provided that the
official receiver may on notice inspect goods, in which case enforcement before the official receiver has had a
reasonable opportunity to inspect the goods requires the leave of the court. See “Administration, Receivership,
Insolvency and Bankruptcy Under English Law—Bankruptcy” below.
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