Renewed controversy came on Tuesday when NatWest brought to court a test case to determine the type of charge to be placed on book debts of defunct company Spectrum Plus. If the court decides they are ‘floating’ charges, the bank gets precedence over other creditors. If they are ‘fixed’, the bank loses preferential treatment.
NatWest hopes that this decision would resolve the Brumark case of 2001, which created the ‘fixed’ or ‘floating’ charge confusion.
However, insolvency practitioners are frustrated and say the Spectrum Plus case will not help because the structure of the company’s debts is different from the majority of cases.
Chantrey Vellacott partner John Heath said that many IPs are ‘fed up’ with the Brumark case and that Spectrum did not look like it’s going to help them at all.
‘I find it rather strange that the bank chose this case because even if thejudge finds in their favour, it doesn’t necessarily apply to other cases. It’s awaste of time,’ he said.
NatWest was unavailable to comment.
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