In 2016 members of Parliament (MPs) proposed legal reforms with the aim of regulating the procedure for the appointment of receivers by debenture holders. Although debate on the issue stopped for a period, it recently re-emerged in vigorous form following the sale of hotel units by receivers who had been appointed by financial institutions pursuant to a floating charge.
Securitisation involves transactions that enable a lender or a creditor – typically a credit institution or a corporation – to refinance a set of loans, exposures or receivables, by transforming them into tradable securities accessible by investors.
The statutory framework regulating the purchase and sale of credit facilities in Cyprus was amended as part of an overhaul of the insolvency framework. The 2018 amendments sit alongside a new securitisation framework.
This note highlights the key aspects of the Purchase and Sale of Credit Facilities and Relevant Matters Law of 2015, as amended in 2018 (the “Law”).
What credit facilities are caught?
In a recent judgment, the Nicosia District Court decided that an affidavit was inadmissible due to the fact that the jurat was not in one of Cyprus's two official languages (ie, Greek or Turkish).(1)
Under the Civil Procedure Law,(1) a judgment creditor has the right to make any immovable property in which his or her judgment debtor is beneficially interested – and which is registered with the Department of Lands and Surveys in the debtor's name – security for payment of the judgment debt.
The rule in relation to money advanced by way of a loan, is that generally they become the property of the borrower, giving him the discretion to apply the money as he thinks fit, and leaving the lender vulnerable to the risk of the borrower’s insolvency.
In the context of streamlining procedures and avoiding lengthy processes, the Insolvency Service and the Bankruptcy and Liquidation Companies’ Division of the Registrar of Companies and Official Receiver of Cyprus announced that the procedure followed for granting authorization to open or maintain a debtor or bankrupt bank account has been abolished.
In January 2018 the District Court sentenced a company in liquidation that had once been Cyprus's biggest grocery retail company.(1) The sentence concerned the issuance of a cheque with insufficient funds.
Introduction
In the English case of Derby& Co v Weldon (No3 and 4) (1990) Ch 65, the Court of Appeal held unequivocally that a court can order a defendant’s assets to be frozen even if they are situated outside of the jurisdiction. However what is vital to be established in such circumstances is: