Time Is An Illusion. Lunchtime Doubly So*

The court reassures lenders on the effect of a termination notice, the meaning of a continuing Event of Default and the effectiveness of reservation of rights letters: Re Pocket Renting.

Appointment of administrator challenged

A former director and indirect shareholder of a borrower challenged the validity of the appointment of administrators over the borrower on two grounds: the floating charge being unenforceable at the time it was made; and, alternatively, the lender having improper motives for appointing the administrators. Dismissing both grounds, the court upheld the appointment as valid.

The borrower entered into a two-year facility agreement with the lender to fund its property business and was in breach within a few months. The lender sent two reservation of rights letters: one shortly after breach and one a month later in relation to the borrower's failure to comply with a property disposal plan and to pay interest. The lender ultimately terminated