The Wealth Finance Brief - 20 June 2014
We have a full and varied edition of The Wealth Finance Brief this quarter.
In our first article, the recent tensions in Ukraine have prompted us to consider the implications of financial sanctions for lenders on their existing facilities and documentation.
Two High Court cases caught our attention – the first concerning the particular issues which arise when taking security over chattels (here a viola, but the implications are the same for other chattels such as art), and the second considering the meaning of "further advances" under anti-tacking provisions (which are commonly contained in charges).
Adding to our library of briefing papers, we have prepared an introduction to Margin Lending, and have recently updated our guide to taking security over land in England and Wales.
Fieldfisher attended the 2014 European Business Aviation Convention & Exhibition ("EBACE") held in Geneva in May and found it a great opportunity to meet up with existing clients and catch up with the latest news in the aviation sector, and of course to experience first hand the buzz around the extended range G650 and Falcon 8X. Staying on the aviation finance theme, in our final article, we provide an update on the progress of the implementation of the Cape Town Convention into UK law.
Hannah Rowbotham, Editor
Lending to Russian and Ukrainian borrowers: Financial Sanctions
The current crisis in Ukraine and worsening relations between the West and Russia make it timely to review how the financial sanctions recently imposed may affect finance transactions. While, at the time of writing, there has been a slight easing in tensions, the position remains highly volatile.
In this note we outline the sanctions imposed by the EU and US, consider what steps might be available to lenders, and what effect the sanctions may have on existing facilities and on documentation. With financial sanctions, however, "the devil is in the detail". It is important to establish exactly which sanctions are applicable, who is affected by them, and their exact terms.
Consumer loan and a pledge over a viola – what happens when the music stops?
Kathryn Bassano v Alfred Toft, Peter Biddulph Ltd, Borro Loan Ltd, Borro Loan 2 Ltd is an interesting case as it highlights a number of potential problems for a lender where an individual in financial difficulties took out successive loans on the security of a chattel (in this case a viola) and none of the lenders knew about the other loans.
Will banks lose priority when amending and restating facilities? High Court considers meaning of "further advances" under anti-tacking provisions.
In the recent case of Re Black Ant Company (in administration) EWHC 1161 (Ch) the High Court provided comfort to secured creditors with first-ranking security that they will not ordinarily lose their priority position if they take steps to alter the terms of an existing transaction.
Security Over Land
In this updated briefing paper, we provide an overview of taking security over land in England and Wales, focussing on commercial and investment property.
Margin Lending – A Brief Introduction
This article sets out a brief summary of a typical margin loan structure, the risks to borrowers and lenders involved in margin lending, steps that can be taken to minimise such risks and some applicable legal considerations for lenders offering margin loans as part of their services.
The Cape Town Convention and Aircraft Protocol: ratification by the UK (II)
In February we reported on the UK government's announcement of its commitment to the ratification of the Cape Town Convention and Aircraft Protocol (the "Convention").
The process of implementation continues and on 12 March 2014 the government published draft legislation in order to designate the Convention as an EU Treaty (for the purposes of section 1(2) of the European Communities Act 1972). This act is one more inroad into the constitutional and legal procedures which will need to be completed in order to achieve the implementation of the Convention in the UK.
The next step is for the government to hold a consultation on the various options for implementation, and we understand this is due to be held later this year. Further updates from Fieldfisher shall follow.
In the meantime, the Convention itself continues to evolve with the launch of the International Registry's "Generation II" website.