The High Court recently issued its ruling in the matter of Re Avanti Communications Limited (in administration). It is the first major case since the pivotal 2005 House of Lords decision of Re Spectrum Plus  to examine the characteristics of fixed and floating charges.

Key points

In the current times of financial stress, a borrower seeking to renegotiate or refinance existing financing arrangements may be asked by its lender to enhance or refresh its security package through the grant of a new floating charge.

The question of whether a floating charge can be avoided due to section 245 of the Insolvency Act 1986 ("IA 1986") can arise in such a context.

Void floating charges under section 245 of the IA 1986

In the previous four articles in this series (see here) we looked at the key role of professional investors at startups, though also at the setbacks of the exclusive dependence of these types of companies on equity and the advantages debt would have for them. The environment, as we saw, is also a favorable one for borrowing. We described the difficulty to provide general recipes for getting debt and a few not very promising routes.

En los cuatro artículos anteriores de esta serie (ver aquí) analizamos el papel clave de los inversores profesionales en las 'startups', pero también las desventajas de la exclusiva dependencia de este tipo de empresas del 'equity' y las ventajas que tendría la deuda para ellas. El entorno, como vimos, es además favorable para el endeudamiento. Abordamos la dificultad de ofrecer recetas generales para conseguir deuda y algunas vías no muy prometedoras.