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Good day sir,
Can you please explain ring-fencing mechamism for payments to unsecured creditors?
Thanks in advance.
It’s all there in the course notes!
A calculated amount is set aside for the benefit of unsecured creditors so that may involve the floating charge debenture holders not receiving their full entitlement
That calculated amount is set aside (protected / ring-fenced) so that people lower down in the ranking sequence for payment in the event of a company’s liquidation will at least get something by way of repayment of the amounts due to them
The basis of that calculated amount is in the course notes
OK?
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