chapter  7
12 Pages

The company in trouble, reconstructions and takeovers

Introduction This chapter covers a great deal of ground. Wrongful trading is important and topical, and knowledge of priorities in a winding up is of great importance.

Loan stock (debentures) Any form of borrowing by a company is technically a debenture (s 744 of the Companies Act (CA) 1985). In practice, the word ‘debenture’ is generally used to describe a secured borrowing and debentures are generally subject to the law of mortgages. The only exception to this principle is that a debenture need not be redeemable at a set date (s 193 CA 1985).